Game Theory: Dynamic Games and the Folk Theorem

How do rational agents cooperate when they interact repeatedly over time? Understanding dynamic games and the Folk Theorem is essential for analyzing long-term strategic behavior in economics, computer science, and social systems. This course guides you through the mathematical foundations of repeated games, helping you transition from simple one-shot decisions to complex, multi-stage interactions. You will learn how threats, promises, and punishments sustain cooperation, and how to apply these concepts to real-world scenarios. What you'll learn: Understand the core principles of dynamic and repeated games; Analyze strategies like Grim Trigger and Tit-for-Tat in infinite horizons; Master the Folk Theorem and its implications for equilibrium payoffs; Calculate discounted utility and evaluate future payoffs mathematically; Explore basic concepts of algorithmic game theory in decentralized environments; Apply equilibrium concepts to model trust and cooperation in modern networks. You will start with fundamental terminology and basic concepts of static games before progressing to dynamic frameworks, discount factors, and the mathematical proofs of the Folk Theorem. The material concludes with modern applications of these models in algorithmic design and decentralized systems. This course is designed for beginners in game theory, economics, or computer science, requiring no prior advanced mathematical background. Start reading today to unlock the strategic logic behind long-term cooperation and decision-making.