| School of Management, (SOM) | ||||
| SM80.36 : Game Theory for Competitive Strategy 3(3-0) | ||||
| Course objectives: | ||||
Game theory is the scientific analysis of conflict and cooperation between multiple strategic agents. The tools of game theory have become standard in many disciplines including economics, strategic management, political science, and international relations. A basic understanding of game theoretic concepts is a valuable asset for today’s managers and leaders. |
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| Learning Outcomes: | ||||
Static games, dominant strategies, Nash equilibrium, repeated interactions, sequential games, cooperative games, players, added value, rules, tactics, and scope of games, social choice. |
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| Pre-requisite(s): | ||||
None |
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| Course Outline: | ||||
I. Static games
1. Normal-form games Dominant and dominated strategies
2. Nash equilibrium
3. Application: auctions
II. Repeated games
1. Nash equilibrium in repeated interactions
2. Reputation
3. Application: pricing games
III. Sequential games
1. Extensive-form games
2. Backward induction
3. Changing the players
4. Application: voting
IV. Cooperative game theory
1. Added value
2. The core and coalition stability
3. The Shapley value
V. Rules, tactics, and scope
1. Changing the rules of the game
2. Tactics and perceptions
3. The scope of a game
VI. Social choice
1. Externalities
2. Coordination problems
3. Tragedy of the Commons
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| Laboratory Sessions: | ||||
None |
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| Learning Resources: | ||||
| Textbook: | ||||
A. Brandenbuger and B. Nalebuff
Co-Opetition: A Revolution Mindset That Combines Competition and Cooperation, Currency Doubleday, 1996.
A. Dixit and B. Nalebuff
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life, W.W. Norton, 1991.
D. Besanko, D. Dranove, M. Shanley, and S. Schaefer
Economics of Strategy by, John Wiley & Sons, 2007.
J. McMillan
Reinventing the Bazaar: A Natural History of Markets, W.W. Norton, 2003.
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| Evaluation Scheme: | ||||
The final grade will be computed from the following constituent parts:
Participation: 20%
Case presentation & write-up: 40%
Final exam (closed book): 40%
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| Instructor(s): | ||||
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