This course provides an introduction to strategic thinking and game theory as powerful tools for managerial decision-making. We will apply game theory to solve management problems and to determine optimal courses of action for decision makers. Game Theory is a structured way of analyzing strategic interactive situations. It provides the basics to the understanding of market competition among few firms, the design of incentive contracts, bidding at auctions, bargaining, and other similar interactive decision problems central to economics and business. 

This course will focus on games of complete/perfect information, and cover topics and strategic problems like competition and collusion, market structure, timing and commitment, bargaining and negotiation, cooperation and dilemmas, coordination problems, and finite and infinite horizons.

Weekly assignments, oral presentations and participation in group discussions (30%)

Assignments will be given out each week at the end of class. At the beginning of each class, several students will be asked to analyze the strategic situations they experienced in the experiments at the end of the last class, and to discuss the observed behavior based on collected decision data. This is followed by group discussions. Marking is done continuously based on content and style of presentation and discussion.

Written assignments (2 x 10%)

Two weekly assignments are to be handed-in by all students of the course in written form and will be marked. They will be announced by the lecturer.

Final exam (50%)

The final exam will cover the entire course. The exam will include some questions which test pure knowledge and other questions which require to apply knowledge to new games and situations, similar to the regular weekly homework assignments. Students may be asked to summarize the essential strategic properties of the situation, to describe the individual incentives of players, to make predictions about behavior based on justified assumptions, to compare those predictions with decision data, and to discuss potential discrepancies. Marking in the final exam will be based on proficiency in applying game-theoretic tools, as well as logic and justification of arguments.

(If the final exam needs to be held in distance-mode, some deviations may apply that can additionally or substitutionally include: multiple-choice testing, open essay questions and/ or oral examination. The form of the final exam will be communicated during class.)