GRA 6664 Game Theory
Firms frequently operate in strategic environments. In such environments performance depends on the decisions of the agent as well as the decisions of its competitors. Game theory is the formal analysis of strategic decision making.
This course teaches you the main principles of game theory, while developing your ability to think and act in strategic environments. You learn to formulate optimal business strategies, taking into account that your competitors are also formulating rational business strategies.
A wide range of business applications are used. These include price setting, contract design, agency relations, voting in boards, auctions, bargaining, advertising, and reputation building.
Gain a proper understanding of game theoretic concepts and modeling: covering equilibrium in static and dynamic games, with varying information structures.
Be able to apply game models to the analysis of decisions in various business environments.
Students will aquire the tools needed to operate profitably in strategic environments by:
- Bidding sensibly in different auctions formats
- Applying well founded strategies in bargaining situations
- Responding appropriately to competitors' pricing strategies in various small markets
- Building and sustaining reputation in repeated business relations
- Using and interpreterating strategic communication in effective ways
- Responding sensibly to threats and promises of competitors
- Organizing contractual relations intelligently with respect to property rights and investments
Students will be able to critically assess weaknesses and strengths of game models applied to business decisions, as well as common non-standard alternatives, based on available evidence.
- Game forms
- Dominant and rationalizable strategies
- Nash equilibrium
- Dynamic games
- Repeated games
- Games with asymmetric information
- Signaling and reputation
Students will participate in two game experiments.
The course is taught over one semester, and consists of lectures (36 hours). In addition two exercise sessions are offered.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
|Exam category||Weight||Invigilation||Duration||Support materials||Grouping||Comment exam|
Form of assessment:
Internal and external examiner
Examination when next scheduled course
|100||Yes||3 Hour(s)||Individual||Written examination under supervision|
|Form of assessment:||Written submission|
|Support materials:|| |
|Comment:||Written examination under supervision|
|Resit:||Examination when next scheduled course|
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.