13044 Game Theory with Business Applications 1

Credits: 3 graduate credits in Business Administration / Business and Industry Economics

Prerequisites: Operations Research, Accounting for Managers, Marketing, Management and Organizational Behavior, Financial Management, Corporate Law for Managers

The course is based on Strategic Thinking: Game Theory with Economics and Business Applications, by Aviad Heifetz (The Open University, 2014) and an online reader, Auctions: From Theory to Applications.

Game Theory is an analytic tool for the study of strategic interactions among decision makers, in scenarios in which the interests of each player are influenced both by their own plan of action and by the plans of action of the other players.

Objectives: To acquaint students with the fundamental tools of Game Theory together with the basic solution concepts in static and dynamic games, and to apply them to a large variety of applications in management.

Topics: The basic concepts of strategic-form games, dominant and dominated strategies, Nash equilibrium, dynamic games, subgame-perfect equilibrium and backward induction, and their applications in the analysis of auctions, bargaining, markets with few competitors (oligopolies), subsidies and tariffs in international trade, investment in public goods, patent races, job search and unemployment, dynamic pricing by a monopolist, legal disputes and nuisance suits, crime and law enforcement, political competitions and international conflicts.

1There is some overlap in the content of this and other courses. For details, see Overlapping Courses.