KS Game Theory, Winter 2009/10
Dr. René Böheim

Game theory is one box of tools which we use to model how decisions are made. These models are abstract representations of real-life situations which makes them very useful in a wide range of situations. In this course we will focus on decision making in economic and business settings, but the ideas of game theory can be applied to almost every situation and are widely used by e.g. psychologists, in political sciences, but also in the natural sciences such as biology. A game in this context is a strategic interaction of players, e.g. competitors deciding about prices, or Bart Simpson deciding on how to beat his sister Lisa in Rock-Paper-Scissors ("Good ol' rock. Nuthin' beats that!") ...

The course is taught in English.

This course counts 4 ECTS towards:

• Diplomstudium (started after Summer 2009): "Special Topics in Economics".
• Diplomstudium (started before Winter 2009): can be accredited for either "General Economics" OR "Industrial Economics, Business and International Economics"
  (requires an accreditation ("Anerkennung") because it's a new course, however, this is easily done at https://elearn.jku.at/anerkennung/).

DATEN AND VENUES

Mo, 05.10.09, 15:30-17:00, BA 9911
Mo, 12.10.09, 15:30-17:00, BA 9911
Mo, 19.10.09, 15:30-17:00, BA 9911
Mo, 09.11.09, 15:30-17:00, BA 9911
Mo, 16.11.09, 15:30-17:00, BA 9911
Mo, 23.11.09, 15:30-17:00, BA 9911
Mo, 30.11.09, 15:30-17:00, BA 9911
ACHTUNG! Do, 10.12.09, 15:30-17:00, K 153C
Mo, 14.12.09, 15:30-17:00, BA 9911
Mo, 11.01.10, 15:30-17:00, BA 9911
Mo, 18.01.10, 15:30-17:00, BA 9911	cancelled due to conference attendance
Mo, 25.01.10, 15:30-17:00, BA 9911	Final Exam

LITERATURE

 

Martin J. Osborne, 2004, An Introduction to Game Theory, Oxford University Press.

Alternative:

• Robert Gibbons, 1992, A Primer in Game Theory, Prentice Hall.
• Martin J. Osborne and Ariel Rubinstein, 1994, A course in game theory, MIT Press. Free download at http://arielrubinstein.tau.ac.il/books.html .

Additional literature:

• C. Anthony di Benedetto, 1987, Modeling rationality in marketing decision-making with game theory, Journal of the Academy of Marketing Science, Vol.15(4), 22-32. (online on campus)

Not required, but highly entertaining reading:

• Dixit and Nalebuff, 2008, The Art of Strategy: A Game Theorist's Guide to Success in Business and Life, Norton.

AIMS

We will learn how to analyse strategic behaviour using game theory, focusing on examples from economics and business. For example, we will examine competition in oligopolistic markets and will analyse likely (and unlikely) outcomes of such competition.

Who should take this course?

All students who are interested in strategic behaviour, this includes students who are aiming for a managerial career as day-to-day decisions require the analysis of competitors, employees, regulatores and other ecnomic agents. In addition, students who consider an academic career in economics or business or intend to work for a government agency.

PREREQUISITES

Some mathematical knowledge is required - but no specific mathematical knowledge beyond that taught in high school is needed. An ability to follow (a liking for?) extended logical arguments is essential. I think that the important ideas of game theory are best studied with real examples, supported by theoretical considerations. For this reason, we will discuss games that arise in everyday business situations. And, of course, we will play several games ourselves.

GRADING

The final grade will be determined as follows:

Problem Sets	30%
Games Participation	30%
Final Exam	40%

 

NB: Students MUST register at http://gametheory.tau.ac.il/student/, password and course number will be made available in KUSSS for enrolled students.

 

Some selected LINKS

Nobel Prize Laureate John F. Nash, jr.:
http://nobelprize.org/nobel_prizes/economics/laureates/1994/nash-autobio.html

Games in TV shows:
http://www.gametheory.net/popular/television.html

Pop music plays games:
http://www.gametheory.net/popular/music.html