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Syllabus for

Academic year
ENM140 - Game theory and rationality
Spelteori och rationalitet
Syllabus adopted 2019-02-14 by Head of Programme (or corresponding)
Owner: MPCAS
7,5 Credits
Grading: TH - Pass with distinction (5), Pass with credit (4), Pass (3), Fail
Education cycle: Second-cycle
Major subject: Engineering Physics

The course is full. For waiting list, please contact the director of studies:
Teaching language: English
Application code: 11119
Open for exchange students: Yes
Block schedule: A
Maximum participants: 25

Module   Credit distribution   Examination dates
Sp1 Sp2 Sp3 Sp4 Summer course No Sp
0114 Project 7,5c Grading: TH   7,5c    

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Kristian Lindgren

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General entry requirements for Master's level (second cycle)
Applicants enrolled in a programme at Chalmers where the course is included in the study programme are exempted from fulfilling the requirements above.

Specific entry requirements

English 6 (or by other approved means with the equivalent proficiency level)
Applicants enrolled in a programme at Chalmers where the course is included in the study programme are exempted from fulfilling the requirements above.

Course specific prerequisites

A Bachelor's degree in science, engineering or economics and some experience of programming/modelling.


The aim of this course is to give an introduction to game theory and evolutionary models within the field, in order to inspire and engage the students so that they can identify and explore game-theoretic dilemmas or situations during the studies as well as in their future work-life. This is achieved through examining basic game-theoretic concepts including the concept of rationality. The students, typically at the end of their undergraduate studies, are tasked individually as well as in group with acquiring knowledge about a series of game-theoretic applications. We focus on the effects of individual rationality on collective outcomes, as well as the resulting behavior of agents with different strategies in a large population. We cover theory of general principles of rational action and examine known limitations on how well this describes human behavior in reality. Secondary aims include getting hands-on experience of modelling in a game-theoretic context as well as training in reading and presenting scientific articles. The course offers students a possibility to deepen their understanding of their subject area through project-based studies of applications within their respective field.

Learning outcomes (after completion of the course the student should be able to)

After completed course the student should be able to:
- formulate a game given a specific strategic interaction of interest within their own discipline
- summarize and present game-theoretic literature corresponding to that assigned during the course
- define and apply models of decision-making agents with actions, interactions and strategies
- construct, implement and simulate a set of their own strategies that will compete in a computer-based tournament
- describe and explain two basic theories of rationality and their known limitations
- use different techniques to find the Nash equilibria in games
- differentiate between and apply extensive and normal (or strategic) form games
- compare and reflect upon the expected outcome from the backward induction principle with situations in real life and the limitations it highlights for the use of the game theory and the concept of rationality
- eliminate strategies from a game based on domination arguments
- identify, analyze and argue about the existence of social dilemmas, such as the tragedy of the commons and public goods games including examples of natural, economic and social origin
- define and apply the concepts of Pareto optimality
- define and solve for mixed-strategy equilibrium
- differentiate between equilibrium in game theory and stable strategies in evolutionary game theory


Game theory is the scientific study of strategic interaction between rational agents, involving analysis of phenomena such as cooperation and conflict in a wide range of biological, economic and social systems. Game theory and its extensions are continuously applied to understand situations such as climate negotiations, how plants grow their roots and distribute seeds under competition, to warfare and auctions.
The content of the course will be influenced by the students attending it (i.e. other topics may be added to the following list). Topics covered in previous years' version of the course include:
Basic game-theoretic concepts, theory and principles of rational decision-making, backward induction and the rationality paradox, analysis of repeated interaction, tragedy of the commons, evolutionary game theory, public good games, agent-based models in economics, behavioral economics and the environment, bargaining theory and dynamic games.


- A lecture series covering game theory basics.
- An exam in the middle of the course on game theory basics.
- 2-5 guest lectures.
- Two assignments, including a tournament between the students computerized strategies.
- A series of student-led seminars: groups of two-four students prepare and organize a discussion around a topic based on two or more papers. All students should read the papers before the meeting.
- A project (80-100 hours work per student) carried out in groups, presented orally and in a written report.


The main course book is Kevin Leyton-Brown and Yoav Shoham, Essentials of Game Theory: A Concise, Multidisciplinary Introduction (2008). The book can be downloaded free of charge through Chalmers' library.
Selected chapters and examples may be distributed from Herbert Gintis, Game Theory Evolving: A Problem-Centered Introduction to Modeling Strategic Interaction (Second Edition, 2009). The book is available as ebook at Chalmers' library.
Reading materials for the student-led seminars will be distributed during the course.

Examination including compulsory elements

Compulsory elements:
◦ two short assignments
◦ attending about two-thirds of the student-led seminars, guest lectures, and project presentations
◦ midterm exam
◦ co-chairing a student-led seminar
◦ oral presentation of project
◦ project report

Grading is done based on:
◦ the midterm exam (max 18 points, minimum 6 points for passing grade)
◦ student-led seminars (0-8 points)
◦ project reports (0-24 points)

Published: Mon 28 Nov 2016.