A set of lecture notes for the first quarter of a graduate microeconomics class, based on classes taught by the author at Tel Aviv, Princeton, and New York Universities.

The authors study interactive situations in which players are boundedly rational. Each player, rather than optimizing given a belief about the other players' behavior, as in the theory of Nash equilibrium, uses the following choice procedure. She first associates one consequence with each of her...

For a steady state to be a Nash equilibrium the agents have to perfectly observe the actions of others. This paper suggests a solution concept for cases where players observe only an imperfect signal of what the others' actions are. The model is enriched by specifying the signal that each player...

Let Gamma be a game in extensive form and G be its reduced normal form game. Let Gamma ^infinity (delta) and G^infinity (delta) be the infinitely repeated game version of Gamma and G respectively, with common discount factor delta. This note points out that the set of SPE payoff vectors of...