
This is a course on game theory and its applications to business; it is not a course on strategy nor on IO. However, as the above definitions shed light, the general view and tools you will acquire in this course will provide a guide to help you understand, formulate and solve any strategic situation—including, of course, the problems you can classify as strategy or IO problems.
Hence, our goal is broader in perspective. We aim to get endowed with the essential tools of game theory, and demonstrate the use of these tools by applying them to a variety business situations and cases.
The course has three parts. In the first part, we study the games under complete information. Loosely speaking, these are the environments in which the participants of a game are completely informed about the relevant aspects of the situation. We will both develop the tools to analyze these games and apply them to a number of IO problems. In the second part of the course we relax the assumption that the players are completely informed about the environment. In this section we will particularly focus on the analysis of auctions. We will first develop a theory of auctions and then we will focus ii on applications and real examples. The last part of the course—time permitting—is on incentives. We will study the problems of adverse selection, moral hazard (principalagent in particular) and signaling.
COURSE FORMAT
In each class, we will introduce formulate and solve games by use of game theoretic tools. In most of the classes, we will run in-class experiments to further illustrate the intuition and idea behind the theory. Then we will discuss, cases and business problems by using the concept we developed.
B8299 Game Theory and Incentives In Business.rar
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