Automotive Mechatronics and Intelligent Vehicles (with thesis)
Master	TR-NQF-HE: Level 7	QF-EHEA: Second Cycle	EQF-LLL: Level 7

General course introduction information

Course Code:

ECE545

Course Name:

Game Theory

Course Semester:

Fall

Course Credits:

Theoretical	Practical	Credit	ECTS
3	0	3	10

Language of instruction:

Course Requisites:

Does the Course Require Work Experience?:

Type of course:

Department Elective

Course Level:

Master

TR-NQF-HE:7. Master`s Degree

QF-EHEA:Second Cycle

EQF-LLL:7. Master`s Degree

Mode of Delivery:

Face to face

Course Coordinator :

Dr.Öğr.Üyesi DİDEM KIVANÇ TÜRELİ

Course Lecturer(s):

Course Assistants:

Course Objective and Content

Course Objectives:	The course gives an introduction to the principles of game theory and mechanism design. It covers equilibria, repeated games, bargaining, and supermodular games. Applications are provided when available.
Course Content:	Oyunda denge, tekrarlanan oyunlar, pazarlık ve süper modüler oyunlar. Geriye Dönük Çıkarım, Bayes Oyunları, Potansiyel Oyunlar.

Learning Outcomes

The students who have succeeded in this course;

Learning Outcomes

1 - Knowledge
Theoretical - Conceptual
1) Analyze complex strategic interactions and decision-making processes using game theory frameworks, including Nash equilibrium, extensive form games, and Bayesian games.
2) Apply game theory principles to model and solve engineering problems in various domains such as network optimization, resource allocation, and auction mechanisms.
3) Critically evaluate the implications of different solution concepts and equilibrium refinements in game theory for real-world engineering scenarios, considering factors such as uncertainty, asymmetrical information, and multi-agent interactions.
2 - Skills
Cognitive - Practical
3 - Competences
Communication and Social Competence
Learning Competence
Field Specific Competence
Competence to Work Independently and Take Responsibility

Lesson Plan

Week	Subject	Related Preparation
1)	• Games in strategic form and Nash equilibrium • Games in strategic form and iterated strict dominance • Nash equilibrium • Existence and properties of Nash equilibria	Read corresponding section in book
2)	• Iterated strict dominance and rationalizability o Iterated strict dominance: definition and properties o An application of iterated strict dominance o Rationalizability o Rationalizability and iterated strict dominance • Correlated equilibrium • Rationalizability and subjective correlated equilibria	Read corresponding section in book
3)	Extensive-form games • Commitment and perfection in multi-stage games with observed actions o Multi-stage games o Backward induction and subgame perfection o The value of commitment and time consistency • The extensive form o Definition of the extensive form o Multi-stage games with observed actions • Strategies and equilibria in extensive-form games o Behavior strategies o The strategic-form representation of extensive-form games o The equivalence between mixed and behavior strategies in games of perfect recall o Iterated strict dominance and Nash equilibrium • Backward induction and subgame perfection • Critiques of backward induction and subgame perfection o Critiques of backward induction o Critiques of subgame perfection	Read corresponding section in book
4)	Applications of multi-stage games with observed actions • Principle of optimality and subgame perfection • A first look at repeated games • The Rubinstein-Stahl bargaining model o A subgame-perfect equilibrium o Uniqueness of infinite-horizon equilibrium o Comparative statistics • Simple timing games o Definition of simple timing games o The war of attrition o Preemption games • Iterated conditional dominance and the Rubinstein bargaining game • Open-loop and closed-loop equilibria o Definitions of equilibria o A two-period example o Open-loop and closed-loop equilibria in games with many players • Finite-horizon and infinite-horizon equilibria	Read corresponding section in book
5)	Repeated games • Repeated games with observable actions o The model o The folk theorem for infinitely repeated games o Characterization of the equilibrium set • Finitely repeated games • Repeated games with varying opponents o Repeated games with long-run and short-run players o Games with overlapping generations of players o Randomly matched opponents • Pareto perfection and renegotiation-proofness in repeated games o Introduction to Pareto perfection o Pareto perfection in finitely repeated games o Renegotiation-proofness in infinitely repeated games • Repeated games with imperfect public information o The model o Trigger-price strategies o Public strategies and public equilibria o Dynamic programming and self-generation • The Folk theorem with imperfect public information • Changing the information structure with the time period
6)	Bayesian games and Bayesian equilibrium • Incomplete information • Providing a public good under incomplete information • The notions of type and strategy • Bayesian equilibrium • Further examples of Bayesian equilibria • Deletion of strictly dominated strategies o Interim vs. ex ante dominance o Examples of iterated strict dominance • Using Bayesian equilibria to justify mixed equilibria o Examples o Purification theorem • The distributional approach
7)	Bayesian games and mechanism design • Examples of mechanism design o Nonlinear pricing o Auctions • Mechanism design and the revelation principle • Mechanism design with a single agent o Implementable decisions and allocations o Optimal mechanisms • Mechanisms with several agents: feasible allocations, budget balance and efficiency o Feasibility under budget balance o Dominant strategy vs. Bayesian mechanisms o Efficiency theorems o Inefficiency theorems o Efficiency limit theorems o Strong inefficiency limit theorems • Mechanism design with several agents: optimization o Auctions o Efficient bargaining processes • Further topics in mechanism design o Correlated types o Risk aversion o Informed principal o Dynamic mechanism design o Common agency
8)	Equilibrium refinements: perfect Bayesian equilibrium, sequential equilibrium and trembling-hand perfection • Perfect Bayesian equilibrium in multi-stage games of incomplete information o The basic signaling games o Examples of signaling games o Multi-stage games with observed actions and incomplete information • Extensive-form refinements o Review of game trees o Sequential equilibrium o Properties of sequential equilibrium o Sequential equilibrium compared with perfect Bayesian equilibrium • Strategic-form refinements o Trembling-hand perfect equilibrium Proper equilibrium	Read corresponding section in book
9)	Reputation Effects • Games with a single long-run player o The chain-store game o Reputation effects with a single long-run player: the general case o Extensive-form stage games • Games with many long-run players o General stage games and general reputations o Common-interest games and bounded-recall reputation • A single big player against many simultaneous long-lived opponents • MIDTERM	Preparation for exam
10)	Sequential bargaining under incomplete information • Intertemporal price discrimination: the single-sale model o The framework o A two-period introduction to Coasian dynamics o An infinite-horizon example of the Coase conjecture o The skimming property o The gap case o The no-gap case o Gap vs. no gap and extensions of the single-sale model • Intertemporal price discrimination: the rental or repeated-sale model o Short-term contracts o Long-term contracts and renegotiation • Price offers by an informed buyer o One-sided offers and bilateral asymmetric information o Alternating offers and one-sided asymmetric information o Mechanism design and bargaining
11)	More equilibrium refinements: stability, forward induction and iterated weak dominance • Strategy stability • Signaling games • Forward induction, iterated weak dominance and burning money • Robust predictions under payoff uncertainty
12)	Advanced topics in strategic-form games • Generic properties of Nash equilibria o Number of Nash equilibria o Robustness of equilibria to payoff perturbations • Existence of Nash equilibrium in games with continuous action spaces and discontinuous payoffs o Existence of a pure-strategy equilibrium o Existence of a mixed-strategy equilibrium • Supermodular games
13)	Payoff-relevant strategies and Markov equilibrium • Markov equilibria in specific classes of games o Stochastic games: definition and existence of MPE o Separable sequential games o Examples from economics • Markov perfect equilibrium in general games: definition and properties o Definition of Markov perfect equilibrium o Existence o Robustness to payoff perturbations • Differential games o Definition of differential games o Equilibrium conditions o Linear-quadratic differential games o Technical issues o Zero-sum differential games • Capital-accumulation games o Open-loop, closed-loop and Markov strategies o Differential-game strategies
14)	Common knowledge and games • Knowledge and common knowledge • Common knowledge and equilibrium o The dirty faces and the Sage o Agreeing to disagree o No-speculation theorems o Interim efficiency and incomplete contracts • Common knowledge, almost common knowledge and the sensitivity of equilibria to the information structure o The lack of lower hemi-continuity o Lower hemi-continuity and almost common knowledge
15)	Final Exam	None

Sources

Course Notes / Textbooks:	Drew Fudenberg and Jean Tirole. Game Theory, 11th Edition. MIT Press, 1991. ISBN:9780262061414.
References:	Zhu Han, D. Niyato, W. Saad, T. Başar, Game Theory for Next Generation Wireless and Communication Networks: Modeling, Analysis, and Design Cambridge University Press 2020.

Course-Program Learning Outcome Relationship

Learning Outcomes	1	2	3
Program Outcomes
1) Sufficient knowledge in mathematics, science and engineering related to their branches; and the ability to apply theoretical and practical knowledge in these areas to model and solve engineering problems.
2) The ability to identify, formulate, and solve complex engineering problems; selecting and applying appropriate analysis and modeling methods for this purpose.
3) The ability to design a complex system, process, device or product under realistic constraints and conditions to meet specific requirements; the ability to apply modern design methods for this purpose. (Realistic constraints and conditions include such issues as economy, environmental issues, sustainability, manufacturability, ethics, health, safety, social and political issues, according to the nature of design.)
4) Ability to develop, select and use modern techniques and tools necessary for engineering applications; ability to use information technologies effectively.
5) Ability to design experiments, conduct experiments, collect data, analyze and interpret results to examine engineering problems or discipline-specific research topics.
6) The ability to work effectively in disciplinary and multidisciplinary teams; individual work skill.
7) Effective communication skills in Turkish oral and written communication; at least one foreign language knowledge; ability to write effective reports and understand written reports, to prepare design and production reports, to make effective presentations, to give and receive clear and understandable instructions.
8) Awareness of the need for lifelong learning; access to knowledge, ability to follow developments in science and technology, and constant self-renewal.
9) Conform to ethical principles, and standards of professional and ethical responsibility; be informed about the standards used in engineering applications.
10) Awareness of applications in business, such as project management, risk management and change management; awareness of entrepreneurship, and innovation; information about sustainable development.
11) Information about the universal and social health, environmental and safety effects of engineering applications and the ways in which contemporary problems are reflected in the engineering field; awareness of the legal consequences of engineering solutions.
12) Knowledge on advanced calculus, including differential equations applicable to automotive engineering; familiarity with statistics and linear algebra; knowledge on chemistry, calculus-based physics, dynamics, structural mechanics, structure and properties of materials, fluid dynamics, heat transfer, manufacturing processes, electronics and control, design of vehicle elements, vehicle dynamics, vehicle power train systems, automotive related regulations and vehicle validation/verification tests; ability to integrate and apply this knowledge to solve multidisciplinary automotive problems; ability to apply theoretical, experimental and simulation methods and, computer aided design techniques in the field of automotive engineering; ability to work in the field of vehicle design and manufacturing.

Course - Learning Outcome Relationship

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	Sufficient knowledge in mathematics, science and engineering related to their branches; and the ability to apply theoretical and practical knowledge in these areas to model and solve engineering problems.
2)	The ability to identify, formulate, and solve complex engineering problems; selecting and applying appropriate analysis and modeling methods for this purpose.
3)	The ability to design a complex system, process, device or product under realistic constraints and conditions to meet specific requirements; the ability to apply modern design methods for this purpose. (Realistic constraints and conditions include such issues as economy, environmental issues, sustainability, manufacturability, ethics, health, safety, social and political issues, according to the nature of design.)
4)	Ability to develop, select and use modern techniques and tools necessary for engineering applications; ability to use information technologies effectively.
5)	Ability to design experiments, conduct experiments, collect data, analyze and interpret results to examine engineering problems or discipline-specific research topics.
6)	The ability to work effectively in disciplinary and multidisciplinary teams; individual work skill.
7)	Effective communication skills in Turkish oral and written communication; at least one foreign language knowledge; ability to write effective reports and understand written reports, to prepare design and production reports, to make effective presentations, to give and receive clear and understandable instructions.
8)	Awareness of the need for lifelong learning; access to knowledge, ability to follow developments in science and technology, and constant self-renewal.
9)	Conform to ethical principles, and standards of professional and ethical responsibility; be informed about the standards used in engineering applications.
10)	Awareness of applications in business, such as project management, risk management and change management; awareness of entrepreneurship, and innovation; information about sustainable development.
11)	Information about the universal and social health, environmental and safety effects of engineering applications and the ways in which contemporary problems are reflected in the engineering field; awareness of the legal consequences of engineering solutions.
12)	Knowledge on advanced calculus, including differential equations applicable to automotive engineering; familiarity with statistics and linear algebra; knowledge on chemistry, calculus-based physics, dynamics, structural mechanics, structure and properties of materials, fluid dynamics, heat transfer, manufacturing processes, electronics and control, design of vehicle elements, vehicle dynamics, vehicle power train systems, automotive related regulations and vehicle validation/verification tests; ability to integrate and apply this knowledge to solve multidisciplinary automotive problems; ability to apply theoretical, experimental and simulation methods and, computer aided design techniques in the field of automotive engineering; ability to work in the field of vehicle design and manufacturing.

Learning Activity and Teaching Methods

Lesson
Group study and homework
Reading
Homework

Assessment & Grading Methods and Criteria

Assessment & Grading

Semester Requirements	Number of Activities	Level of Contribution
Project	1	% 20
Midterms	1	% 30
Final	1	% 50
total		% 100
PERCENTAGE OF SEMESTER WORK		% 50
PERCENTAGE OF FINAL WORK		% 50
total		% 100

Workload and ECTS Credit Grading

Activities	Number of Activities	Duration (Hours)	Workload
Course Hours	14	3	42
Project	1	50	50
Midterms	1	50	50
Final	1	60	60
Total Workload			202