Game Theory for Business Strategy

This subject has the following teaching availabilities in 2014:

For the purposes of considering request for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Student Support and Engagement Policy, academic requirements for this subject are articulated in the Subject Overview, Learning Outcomes, Assessment and Generic Skills sections of this entry.

It is University policy to take all reasonable steps to minimise the impact of disability upon academic study, and reasonable adjustments will be made to enhance a student's participation in the University's programs. Students who feel their disability may impact on meeting the requirements of this subject are encouraged to discuss this matter with a Faculty Student Adviser and Student Equity and Disability Support: http://services.unimelb.edu.au/disability

Managers make decisions day in, day out. These decisions affect others both within the firm, such as other divisions and subordinates, etc., as well competitors, customers, regulators, and even capital markets. Moreover, the outcome of these decisions depends on the decisions of others. Therefore, anticipating the reaction of others is essential for making the best decision and reaching a successful outcome. This course introduces basic tools to analyze such choices: concepts of individual decision-making and of strategic interaction (game theory). A combination of these tools will lead students to approach managerial problems critically and analytically. As a result, students will be able to think strategically in complex, interactive environments.

On completion of this subject, students should be able to:

• think strategically in interactive environments;
• understand how game theory can be used to anticipate market dynamics;
• understand the foundations of bargaining and negotiation theory;
• understand how game theory can be used to design efficient auctions and tenders;
• understand strategic importance of asymmetric information.

• Contribution to class learning (10%)
  • Throughout subject
• 4 problem sets (60%)
  • Throughout subject
• Final examination (30%)
  • Hurdle requirement
  • End of subject

This subject is not available as a breadth subject.