General Information about the specialization Decision Sciences
SBWL Decision Sciences: Game Theory, Psychology, and Data Analysis
Strategic thinking, understanding psychological mechanisms of decision-making, and evidence-based analysis are of utter importance in the world of business and government. Too many bad decisions are made because of a lack of understanding of basic incentives and decision-making, and proper data analysis. The SBWL “Decision Sciences” trains students’ strategic thinking, psychological knowledge, and analytical capabilities in applied problem-solving. In a problem-based teaching approach, it shows students how to generate data to substantiate evidence-based managerial decision-making, properly analyze it and draw conclusions. It further trains them to understand the psychological basis of decision-making, to analyze the incentives of decision-makers and the market forces they are subjected to, and to predict their behavior.
The obtained competencies will prepare students directly for the job market. The main target audience are students who want to work and excel in positions with analytical and strategic roles. This includes consultants in all flavors like corporate finance (e.g. due diligence work), human resources (e.g. incentive systems), strategy consultancy (e.g. analysis of strategic market positioning), or supply chain management (process optimization and negotiation handling). It also includes corresponding roles within companies, like special assistant to management, key project managers, HR managers, data analytics specialists, risk management, forensic analysts, mergers and acquisitions, or supply chain management.
The SBWL “Decision Sciences” builds on the foundations provided in the STEOP/CBK (Grundlagen der BW/VW, Angewandte Mikorökonomik, Mathematik & Statistik) and the common BW courses (e.g. Personal, Führung, Organisation). The SBWL can provide important foundations for the study of other SBWLs (e.g. Entrepreneurship und Innovation, Unternehmensführung und Controlling, Personalmanagement, Verhaltenswissenschaftlich orientiertes Management, Data Science etc).
Structure and Courses
The SBWL Decision Sciences is taught entirely in English. It is comprised of a set of six courses. All courses will be offered in each semester.
The courses Empirical Data Analysis, Business Psychology I, and Game Theory I (full names and contents below) will usually be offered in the first half of a semester. These courses are compulsory courses.
The courses Business Psychology II, Game Theory II, and Project course (full names and contents below) will be usually offered in the second half of a semester. Student have to take two out of these three courses. This could for instance be either Business Psychology II + the Project Course, or Game Theory II + the Project course, or Business Psychology II + Game Theory II.
Students can complete the SBWL in one, two or three semesters.
|Course I||Game Theory I: Strategic Behavior|
|Course II||Psychology I|
|Course III||Empirical Data Analysis|
|Course IV||Game Theory II: Information OR Psychology II|
|Course V||Project Course OR Game Theory II: Information OR Psychology II|
If you plan to take the Project Course (course V): you must complete Course I, Course II AND Course III first, then as course IV you can choose between Game Theory II and Psychology II
If you plan to NOT take the Project Course (course V): you can choose Game Theory II as your Course IV and Psychology II as Course V OR the other way around
Please note before you can enrol in the Project Course (Course V), you have to complete Course I, Course II AND Course III
It is possible to take both Game Theory I and Game Theory II AND Psychology I and Psychology II in the same semester
If you have any questions please ask them at the mandatory Kick-Off Meeting at the beginning of the semester.
On successful completion of the SBWL, students should be able to:
be familiar with different sources of empirical evidence (surveys, experiments, field data) and the appropriate methods to analyze them,
demonstrate basic knowledge and understanding of game-theoretical tools and solution concepts,
demonstrate an understanding of the underpinnings and core psychological concepts involved in managerial decision-making,
analyze strategic situations and the incentives of players therein,
analyze decision-making behavior with respect to psychologial aspects and biases,
derive predictions about decision-making and behavior in economic contexts,
evaluate and analyze data of actual decisions made in strategic situations, and derive conclusions,
based on these insights, formulate recommendations for policy/strategy interventions,
present and discuss findings from that strategic and psychological analysis and evaluation of actual decisions,
work collaboratively to analyze and understand strategic problems, psychologcial mechanisms, and data.
Empirical Data Analysis
For the data course the knowledge from the Statistics course taught in the STEOP/CBK phase is a prerequesite. It discusses how we can create and analyze evidence and data in the real world. A special focus lies on methods to establish causal relationships - i.e. to really find out what drives what. In order to do so, the course follows a heavily hands-on method. All analyses are introduced and discussed with real-world examples and also tried in statistics software on real data.
Empirical Data Analysis (PI, 2 SWS)
Empirical identification problem
Basic and multiple regression
Instrumental variables, regression discontinuities analysis
Laboratory, online, and field experiments
Time series data analysis
Issues and prospects of big data analysis
Game Theory I + II
The game theory and strategic thinking courses will introduce the students to the analytical tools of game theory. Unlike standard game theory courses, these courses will be organized around applications of game theory (and not around formal game characteristics). Each class will last about 3 hours. At the end of each class, students will participate in classroom experiments where they will be put in business-like decision situations and make real choices. Homework assignments will consist of guided theoretical analysis of the games played, as well as of analysis of the collected decision data. The lectures will be used for an interactive (cold-call-supported) in-depth discussion of the games and data and to provide the necessary theory and game-theoretic tools to fully understand these problems. Student will be asked to reflect on the applicability of the learned content in an online blog.
Game Theory I: Strategic behavior (PI, 2 SWS)
Basics of game theory, what is a strategy?
Markets: Competition and collusion, market structure
Markets: Timing and commitment
Bargaining and negotiation, committee agenda setting
Cooperation, common pools and public goods
Reward and punishment, the carrot and the stick
Finite and infinite horizons
Game Theory II: Information (PI, 2 SWS)
Advanced concepts in game theory, imperfect information
Private value auctions
Common value auctions
Signaling and cheap talk
Herding and information cascades
Business Psychology I + II
The business psychology courses will provide students with an overview about the functioning of firms and institutions and its dependency on individual actors and their interaction within the institution. Human behavior is partly unpredictable because it arises from people’s deep-seated needs and value systems, which are often unknown. These courses aim to change that. Each class will last about 3 hours during which students will participate in classroom experiments and case studies to experience the just learned mechanisms hands-on. Homework assignments will consist of take home quizzes and tests to consolidate the newly learned constructs. The courses will heavily rely on feedback and short quizzes in class to foster participation and involvement with the presented material.
Business Psychology I (PI, 2 SWS)
Motivation & incentives
Attitude development & perception
Judgment & decision making
Choice and context
Social Cognition and blind spots
Manipulation, nudging, and practical implications
Methods to investigate individual level attitudes & behavior (e.g., survey creation and analysis)
Business Psychology II (PI, 2 SWS)
Leadership behavior & power
Group structure & process
Trust and cooperation
Project/ Advanced Course
Project / Advanced Course (PI, 2 SWS)
The Project and Advanced Course will be offered as a capstone course for the SBWL. The specific design and offerings of this course may vary from term to term, in order to cater to the heterogenous skills/interests of students and depending on the availability of real-world business projects.
In its “project course” incarnation, the capstone course will allow students to work on real-world projects. These projects typically include analysis of strategic questions with support from the analysis of decision data. (For example, if the industry partner is an online trading platform, one team may analyze their auction selling mechanisms, another team the design of trader feedback, a further team may look at search behavior of consumers, etc. All these analyses will rely on information and data provided by the industry partner and will target strategic research questions of direct value to the partner.) Previous project partners included auction and e-commerce platforms, Austrian Airlines, Raiffeisen Bank, Reed Messe, and others. The project work includes initial, intermediate, and final presentations to project partners as well as writing of a project report.
In its “advanced course” incarnation, the capstone course will dive deeper into the topics discussed in the previous game theory and business psychology courses. For example, a “Negotiation analysis” course could review the game-theoretical literature on negotiations and bargaining and train students with the use of role-play case studies. As another example, a “Decision biases” course could review the most recent literature in business psychology on managerial decision biases and develop measures to counter them.