The purpose of this course is to understand social interactions through game theory. The design of social institutions (e.g., marriage, property rights, electoral systems, markets) and the way they function matter to every facet of our lives. Often, the outcomes depend on what game theorists call 'strategic' behaviour. This is just saying that our actions and choices are made keeping in mind the actions and choices of others. For instance, my decision to be a good citizen (in class, in life) may well depend on similar decisions by others. The outcome (e.g., pollution, global warming, traffic congestion, the spread of Covid) is the aggregate of each of these micro-decisions. Clearly these can be good or bad. Indeed, very often they are bad despite well intentioned policies. Why is that?
In this course we aim to introduce multi-agent interactions using game theory. We will follow an example-based approach where intuitive reasoning would be provided to explain various phenomena as mentioned earlier. This would illuminate why co-operation can be hard and when it can be sustained. We will discuss, using examples, how one can circumvent the problem of inefficiency led by strategic interactions. Several applications from market and institution design such as voting, auctions and matching will be discussed. Further, it is interesting to model some of the observable characteristics in the biological kingdoms as strategic interactions. For instance, consider oak trees in a wood shading each other. If the surrounding trees are tall, then a tree must also grow tall to get more light. We will discuss how modeling such observations as games helps us understand evolutionary outcomes in phenotypic terms.
