GRA 6664 Game Theory

GRA 6664 Game Theory

Course code: 
GRA 6664
Course coordinator: 
Tom-Reiel Heggedal
Course name in Norwegian: 
Game Theory
Product category: 
MSc in Applied Economics
2023 Autumn
Active status: 
Level of study: 
Teaching language: 
Course type: 
One semester

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.

Learning outcomes - Knowledge

Students will:

Gain a proper understanding of game theoretic concepts and modelling: 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.

Learning outcomes - Skills

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 interpreting strategic communication in effective ways
  • Responding sensibly to threats and promises of competitors
  • Organizing contractual relations intelligently with respect to property rights and investments
General Competence

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.

Course content
  • Game forms
  • Dominant and rationalizable strategies
  • Nash equilibrium
  • Dynamic games
  • Repeated games
  • Games with asymmetric information
  • Signalling and reputation

Students will participate in two game experiments.

Teaching and learning activities

The course is taught over one semester, and consists of lectures (36 hours). In addition two exercise sessions are offered.

Software tools
No specified computer-based tools are required.
Additional information

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.


Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Form of assessment:
Written submission
Exam code:
GRA 66641
Grading scale:
Grading rules:
Internal examiner
Examination when next scheduled course
100Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual Written examination under supervision
Exam category:Submission
Form of assessment:Written submission
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:Written examination under supervision
Exam code:GRA 66641
Grading scale:ECTS
Resit:Examination when next scheduled course
Type of Assessment: 
Ordinary examination
Total weight: 
Student workload
36 Hour(s)
Prepare for teaching
24 Hour(s)
Seminar groups
20 Hour(s)
Student's own work with learning resources
50 Hour(s)
30 Hour(s)
Sum workload: 

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.