4708945: CF_I cut you choose: what you should know about game theory to shape your decisions!

Description

How game theory is applied in the movie "a beautiful mind"? How does game theory impact your daily life? How can you make better decisions in future? How much should you bet at eBay? Are Saturn & Media Markt too expensive? How to win architecture awards? How to improve your bargaining rationales?

You will get answers to above highlighted questions following this interactive workshop structure:

• Introduction to Game Theory: This course shows you how you shall use concepts of game theory to your advantage. We will sharpen your strategic thinking skills. Ideas such as dominance, backward induction, Nash equilibrium, evolutionary stability, commitment, credibility, asymmetric information, adverse selection, and signaling are discussed and applied to games played in class and to examples drawn from economics, politics, the movies, architecture, law, biology, computer science and elsewhere.
• Models of Competition: pure competition, monopolistic competition, oligopoly and pure monopoly
• Describing and Analyzing Market Structure: Why the Big gets Bigger?
• The Role of Competition Intensity in a Market: negotiation with/without competition, prisoners dilemma, dealing with collusive markets, the effect of price clauses
• Creation of Competition through Alternatives: the competition matrix, total cost of ownership
• Negotiation on Markets of low Competition: the pie of a negotiation, the "Nash"-solution, sealed offers, "I cut you choose", negotiation judo
• Negotiation on Markets of high Competition: hong-kong auction, English auction, dutch auction, the exposure problem
• List of games in game theory: Chicken, ultimatum game, prisoners dilemma, matching pennies, cake cutting, deadlock game
• Critical Success Factors to play the Market: the ultimatum game, the effect of commitment
• Fairness and Bargaining, Experiments in Strategic Interaction
• Cross-functional experiments on game theory: Microsoft as a monopoly? How much should a bet at ebay? Are Saturn & Media Markt too expensive? How to win architecture awards?

Learning Outcomes

• Establish a critical way of thinking about strategic interactions in real life and in business situations.
• Provide a formal, analytical toolset through game theory to study aspects of co-operation, co-ordination, differentiation and negotiation.
• Adapt the above mentioned toolset and incorporate other basic economic and behavioral insights to evaluate good business decisions including cross-functional aspects (e.g. architecture, IT) .
• Apply and discuss the most important toolsets for interdisciplinary topics / cases
• Develop a clear analytical way of thinking about how different parties could create, sustain and appropriate value.
• Provide cross-functional cases and other real life examples to illustrate the usefulness and complexities of applying theories.

Lectures Method

Theoretical inputs, readers, team work, experiments, case studies, role plays, games

Admission Requirements

Students should possess the willingness and interest to analyses real world problems using analytical methods and to acquire the tools necessary to do so.

Literature

Essays and extracts from the below listed literature list:

• Dixit, Avinash und Susan Skeath, 2004. Games of Strategy. New York: Norton.
• Fudenberg, Drew und Jean Tirole, 2000. Game Theory. Cambridge, Mass: MIT ? Press.
• Gintis, Herbert, 2000. Game Theory Evolving. Princeton, NJ: Princeton University Press (neue Aufl. 2009 - die alte Auflage ist umfassender).
• Haifetz, Aviad, Game Theory. Interactive Strategies in Economics and Management. Cambridge, UK: Cambridge University Press.
• Myerson, Roger, B., 1997. Game Theory. Analysis of Conflict.
• Osborne, Martin J., 2009, An Introduction to Game Theory. Oxford: Oxford University Press.
• Rapoport, Anatol, 1998, 2. Aufl., Decision Theory and Decision Behaviour. London: Macmillan.

Materials

Additional Literature:

• Berz, Gregor, 2015. Spieltheortische Verhandlungs- und Auktionsstrategien, Schäffer / Poeschl.
• Diekmann, Andreas, 2016. Spieltheorie. Einführung, Beispiele, Experimente. 4. Aufl. Reinbek: Rowohlt.
• Dixit, Avinash und Susan Skeath, 2004. Games of Strategy. New York: Norton.
• Fudenberg, Drew und Jean Tirole, 2000. Game Theory. Cambridge, Mass: MIT ? Press.
• Gintis, Herbert, 2000. Game Theory Evolving. Princeton, NJ: Princeton University Press (neue Aufl. 2009 - die alte Auflage ist umfassender).
• Haifetz, Aviad, Game Theory. Interactive Strategies in Economics and Management. Cambridge, UK: Cambridge University Press.
• Holler, Manfred und Gerhard Illing. 2009. Einführung in die Spieltheorie. 7. Aufl. Berlin: Springer.
• Maschler, Michael, Eilon Solan und Shmuel Zamir, 2013. Game Theory. Cambridge, England: Cambridge University Press.
• Myerson, Roger, B., 1997. Game Theory. Analysis of Conflict.
• Cambridge, Mass.: Harvard University Press.
• Osborne, Martin J., 2009, An Introduction to Game Theory. Oxford: Oxford University Press.
• Rapoport, Anatol, 1998, 2. Aufl., Decision Theory and Decision Behaviour. London: Macmillan.
• Rasmusen, Eric, 2001. Games and Information. 3. Aufl. Oxford: Blackwell.
• Riechmann, Thomas, 2007. Spieltheorie. 2. Aufl. München: Vahlen.

Comments

Cross-faculty elective subject:
Notice the special Multi-stage allocation process.