Universität Wien

040158 UK Strategic thinking in practice (BA) (2015W)

8.00 ECTS (4.00 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 05.10. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 06.10. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 12.10. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 13.10. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 19.10. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 20.10. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Tuesday 27.10. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Tuesday 03.11. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 09.11. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 10.11. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 16.11. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 17.11. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 23.11. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 24.11. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 30.11. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 01.12. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 07.12. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 14.12. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 15.12. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 11.01. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 12.01. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 18.01. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 19.01. 11:30 - 13:00 Seminarraum 15 Oskar-Morgenstern-Platz 1 3.Stock
  • Monday 25.01. 11:30 - 13:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Tuesday 26.01. 11:30 - 13:00 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 different parties? When is it desirable to cooperate and when does your business need to compete? How can your business best place itself to profit from these everyday interactions? Game theory, particularly over the past 40 years, has developed a variety of new tools that can aid decision-makers. 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 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 first 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
and incentives. There will be a lot of simple stylized examples and real-world situations,
that we will discuss in the context of each specific topic of the course. The second 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. Individual and 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 costs 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)

Assessment and permitted materials

Assessment:

Assessment will be based on one midterm and one final test (written tests, 35% each) and 20-25 min presentation of own project in class (30%). In total the minimum of 65% is required to pass the course. The midterm and final tests will be based on the material of the lectures. 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/payoffs; what game is this?
what are the incentives? are there "tensions" between incentives of different 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.

Tools allowed at the midterm and final test:

Students can use calculators. Other electronic devices, as well as books, slides or lecture notes can NOT be used.

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