Game Theory for Managers

2.5 credits

This course develops game-theoretic tools that can be used to provide both quantitative and qualitative prescriptions for profit-maximizing behavior in a variety of strategic settings. The basic concepts are introduced through applications to strategic settings that one encounters in typical business situations. However, the game-theoretic concepts themselves are quite general, as the goal of the course is provide students with both an understanding of these concepts, and a tool kit with which to evaluate a broad range of strategic problems. The set of strategic problems specifically discussed includes the pricing of new and existing goods in the presence of substitutes and complements, determining advertising and R&D expenditures, analyzing market entry, exit, and entry deterrence opportunities, and evaluating bargaining and auction environments. Extensive use is made of examples from both private- and public sector analyses of strategic interactions among firms.