This course introduced judges, lawyers, and policy makers to game theory with an emphasis on practical applications. No background in math or economics was needed. Game theory is the study of human interaction. Specifically, game theory is the study of strategic behavior where each party’s action depends on what he or she expects the other parties to do. We analyzed two types of canonical situations that permeate legal regimes and institutions: “dynamic” cases, where each party observes his opponent and accordingly decides on his next move, and “static” cases, where each actor must decide on a course of action without knowing (but guessing) the other party’s strategy. For each category, we learned how to describe the “game” and how to predict the outcome. We also learned how changing the rules of the game — that is, how changing the law — can affect the parties’ behaviors. The course covered concepts and methodologies such as dominance, Nash equilibrium, multiple equilibria, backward induction, adverse selection, and signaling. We then used these tools to illuminate and analyze different areas of the law, including torts, property, contracts, international trade, antitrust, amnesty programs, civil procedure, and criminal law. We also evaluated how game theory is useful in better understanding how lawyers develop litigation strategies as well as how it can be used to better understand negotiation and settlement dynamics. Special attention was given to incentives provided by different legal rules and their welfare effects.

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