Lorand Ambrus-Lakatos
Term: Fall 1993
Department of Political Sciences


I. General Theory

1. Individual Decisions and Rationality (3 lectures)
Methodological Individualism
The Logic of Individual Decision Making
Descriptive and Nominative Theories of Rationality

Assigned Readings:
Winch, Peter (1958): The Idea of a Social Science and its Relation to Philosophy, Routledge and Kegan Paul,
Gilbert, Margaret (1989): On Social Facts, Routledge, 22-57;
Tversky, Amos - Daniel Kahneman (1986): "Rational Choice and the Framing of Decisions", in R. Hogarth- M. Reder (eds.): Rational Choice, University of Chicago Press, 67-94;
Kreps, David (1988): Notes on the Theory of Choice, Westview Press,1 -7;
Elster, Jon (1983): Ulysses and the Sirens, Cambridge University Press,1 35;

2. Interactive Decision Theory (5 lectures)
The Realm of Game Theory
Self-Enforcing Agreements
Games in Time
Games and Information
Repeated Games and Social Norms

Assigned Readings:
Kreps, David (1990): Game Theory and Economic Modelling, Oxford: Clarendon Press, 9-65, 77-91;
Schelling, Thomas (1960): The Strategy of Conflict, Harvard University Press, Chapter 2;

3. Social Situations and Institutions (5 lectures)
Strategic Behavior on Markets
Bargainig, Auctions and Contracts
Acquiring Reputation
Rumors and Herd Behavior

Assigned Readings:
Arrow, Kenneth (1963): Uncertainty and the Welfare Economics of Medical Care, American Economic Review 53, 941-973;
Hotelling, Harold (1929): Stability in Competition, Economic Journal 39, 41 -57;
Hayek, Friedrich (1945): The Use of Knowledge in Society, American Economic Review 35, 519-530;
Tirole, Jean (1988): The Theory of Industrial Organization, MIT Press, 21-34;
Schelling, Thomas (1975): Voting Schemes, Harvard University, manuscript;
Kreps, op. cit., 65-77;
Kapferer, Jean-Noel (1990): Rumors, Transaction Publishers;

4. Rationality and Knowledge Revisited (3 lectures)

Common Knowledge
Bounded Rationality
Multiple Selves

Assigned Readings:
Binmore, Ken (1990): Aims and Scope of Game Theory, in his Essays on the Foundations of Game Theory, Basil Blackwell,1-42;
Pettit, Philip - Robert Sugden (1989): "The Backward Induction Paradox", Journal of Philosophy 86,169-182;
Rubinstein, Ariel (1991): "Comments on the Interpretation of Game Theory", Econometrica 59, 909-924;
Simon, Herbert (1976): "From Substantive to Procedural Rationality", in: S. Latsis (ed.): Method and Appraisal in Economics, Cambridge University Press;129-148;
Schelling, Thomas (1985): "Enforcing Rules on Oneself", Journal of Law, Economics, and Organization 1, 357-374;
Johnston, Mark (1988): "Self-Deception and the Nature of the Mind" in: B. MacLaughlin - A. Rorty (eds.): Perspectives on Self-Deception, University of California Press;

II. Focusing on an Area (10 lectures)
A field from among the following will be reviewed and analyzed:
a. Common Knowledge and Collective Intentionality
b. Knowledge and Time
c. Man a Machine - Society a Machine
d. Rules
e. The Analysis of the Interaction of a Large Number of Individuals
f. Techniques of Deception

Grades will be based on:
Midterm Exam (after the General Theory part): 50%, Essay (after the course)50%

Digitized version prepared by the curriculum Resource Center (CRC)
CEU Budapest, Hungary
Revised: May 1996


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