Owen Graduate School of Management
Vanderbilt University
Spring 2001, Module IV
Owen Graduate School of Management
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| Objectives | People rarely make decisions in a vacuum. The choices we make affect the
profitability and happiness of others, and their choices can impact us. Game Theory offers a systematic way of analyzing strategic
decision making in interactive situations. This course develops general
techniques that can be applied to understanding business strategy. Some
tools we will use include
These will then be applied to some general topics
Lastly, we will analyze some particular types of games, including negotiation and auctions. The ultimate goal of this course is to enhance the student's ability to think strategically in complex, interactive situations. |
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| Course | This course is designed to provide you with a framework for thinking
about interactive strategic settings. There are four aspects of this:
theory, experimentation, application, and broader understanding.
The theory aspect presents general principles of strategic interaction. Experimentation is accomplished by your participation in simulated games online, prior to each lecture. For some games, you will be randomly matched against a classmate to determine your payoffs, or profits, from the game. Application of the theory is the primary purpose of the group projects. In order to gain a broader understanding of game theory, it is necessary to realize the similarities between many strategic settings, both in business as well as in life. Often, course readings will demonstrate the application of principles to sports, movies, popular culture, nature, etc. While perhaps serving as a nice break from the theory, these applications have a broader goal. It is often said that consulting is 10% understanding the concepts, and 90% the ability to communicate them. Many game theoretic concepts appear counterintuitive at first. Having a toolbox of simple analogies and explanations will empower you to convince others of your decisions. |
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| Readings | The text for this course is Games of Strategy. Avinash Dixit and Susan Skeath. New York: WW Norton, 1998. There are additional readings available online through the course web site: http://www2.owen.vanderbilt.edu/mike.shor/courses/GTheory/. These additional readings range from the whimsical to the serious. Occasionally, the additional readings will allow you to look deeper at the material, or will present concepts that will not be covered in class directly. | ||||||||||
| Administration | Read the assigned chapter(s) in the text prior to each lecture. Do not worry if you do not understand the technical or graphical analysis on the first try. The lectures will help you master these concepts. However, it is important to grasp the intuition behind the principles suggested. You are also required to read any supplementary handouts distributed in class or available on the course web site. At least one final exam question will be based on these readings. You will also be required to participate in an experimental game prior to each lecture. These are not graded, but participation is mandatory. |
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| Grading | Your grade will depend on four group deliverables, participation in
experimental games, and a
final exam.
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| Honor Code | The value of the experimental games is diminished with prior knowledge of the game. Therefore, it is a breach of the honor code to discuss the content of an experimental game with another student in the course who has not yet participated, or to gain information about an experimental game in which one has not yet participated. Further, as some of these games will be used in future mods, one may not discuss the content of the experimental games with other students who may take this course in the future. Further, the "standard" caution about not giving or receiving assistance on the final exam and properly attributing cited or paraphrased material apply. |