Universität Wien

040038 UK Strategic thinking in practice (BA) (2014S)

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work
Moodle

Registration/Deregistration

Note: The time of your registration within the registration period has no effect on the allocation of places (no first come, first served).

Details

max. 50 participants
Language: English

Lecturers

Classes (iCal) - next class is marked with N

  • Monday 03.03. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 10.03. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 17.03. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 24.03. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 31.03. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 07.04. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 28.04. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 05.05. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 12.05. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 19.05. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 26.05. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 02.06. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 16.06. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Tuesday 24.06. 08:00 - 11:00 Seminarraum 3 Oskar-Morgenstern-Platz 1 1.Stock
  • Monday 30.06. 09:45 - 11:15 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock

Information

Aims, contents and method of the course

Motivation:

Everyone would agree that thinking strategically is important. Everyone knows that it is
essential to lead a business. And economics and game theory have a lot to say about this
subject! This course will be particularly useful to those who consider starting their own
business and take important managerial decisions to optimize their business's performance. Economics analyzes your future business's place in the world. Who does your business interact with? How does it interact with these dierent parties? When is it desirable to cooperate and when does your business need to compete? How can your business best place itself to prot from these everyday interactions? Game theory, particularly over the past 40 years, has developed a variety of new tools that can aid managers and decision-makers in general. It has been used by economists to consider alternative business strategies, including their strengths and weaknesses, to study the likely outcomes of day-to-day interactions and to formulate processes to ensure the best possible results. This course will focus on these recent advances in economic theory and practice. It will provide an integrated framework to deal with decision-making, competition, contracting, bidding and incentives, -- subjects that cover key economic principles and that are particularly
valuable for business.

Content:

The course will be split into two parts. The rst part is a series of lectures on game-
theoretic foundations of core economic principles and phenomena. It aims at providing an
integrated framework to deal with decision-making, competition, contracting, bidding
and incentives. There will be a lot of simple stylized examples and real-world situations,
that we will discuss in the context of each specic topic of the course. The second (shorter)
part is presentations by students of their projects (see more details below).

Course Outline

1. Introduction and overview of the course. Some simple games: competition, coordination, and guessing.

2. Strategic decision-making.

(Framing decisions, identifying player roles, common decision-making pitfalls; sequential, simultaneous and repeated games; examples and real-life situations.)

3. Negotiations, bargaining

(Ultimatum game, wage and price bargaining, Rubinstein bargaining model, sources of bargaining power, alternative opportunities and cos of delay, negotiations under uncertainty, screening and signalling in different markets)

4. Incentives, contracting

(Principal-agent problem, marginal incentives, optimal effort choice and optimal choice of contract, discontinuous incentive schemes)

5. Bidding, auctions

(Bidding competition, private and common value, open and sealed-bid auctions, private and common-value auctions, bidding strategy, the winner's curse, bidding conspiracies)

Assessment and permitted materials

Assessment:

Assessment will be based on one midterm and one nal test (35% each) and 15 min presentation of own project in class (30%). The project should be
based on a real-world situation/precedent/business case that was described in press or in
economic books (see suggested reading section below). The task is to identify strategic
reasoning behind the chosen situation and to describe and analyze it formally (identify players, sets of strategies, potential outcomes/payos; what game is this?
what are the incentives? are there "tensions" between incentives of dierent players? what
information do players have? what is a game-theoretic framework for the situation? is this
situation better represented by a sequential or simultaneous or repeated game? can you
identify an equilibrium of the game? was the theoretically predicted equilibrium played in
the actual situation? why/why not? is there a possibility of Pareto-improvement and how
could that be reached? etc.)

Pre-requisites:

The course will assume basic pre-requisites in microeconomics and familiarity with basic
concepts of non-cooperative game theory.

Minimum requirements and assessment criteria

Examination topics

Reading list

The main texts for the course are A. K. Dixit and B. J. Nalebuff "Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life", 1993, and J. Mc Millan "Games, Strategies, and Managers", New York and Oxford: Oxford University Press, 1992.

This may be supplemented by some additional readings as we proceed, which will be posted on my web page.

For reference you can also use any introductory and other game-theory books, such as R.
Gibbons "A Primer in Game Theory", M. J. Osborne "An Introduction to Game Theory",
R. Myerson "Game Theory: Analysis of Conflict".

For inspiration in choosing a topic for your project the suggested reading is "The Economist" (magazine) and books:

Steven D. Levitt , Stephen J. Dubner "Freakonomics: A Rogue Economist Explores the
Hidden Side of Everything"

Joshua Gans "Parentonomics: An Economist Dad Looks at Parenting"

Steven E Landsburg "The Armchair Economist: Economics and Everyday Life"

B. Nalebuff and A. Brandenburger (1997) "Co-opetition"

Adam M. Brandenburger "Co-Opetition : A Revolution Mindset That Combines Com-
petition and Cooperation : The Game Theory Strategy That's Changing the Game of
Business"

Joshua Gans (2005) "Core Economics for Managers "

Association in the course directory

Last modified: Mo 07.09.2020 15:28