Strategic Game Theory for Managers

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The subject, Strategic Game Theory for Managers, is an elective subject on the full-time MBA at the AGSM.

World Cup final 2006, penalty shoot-outs.

The lunchtime presentation is Here. Here (printable).

2008 Course Outline and Assessment
2008 Readings Package

Pre-course reading -- "Thinking Strategically"

Lectures:

• Lecture 1: Thinking about Strategic Games OHs || Printable
  • The 'Myth of Market Share': Can Focusing Too Much on the Competition Harm Profitability?
• Lecture 2: Simultaneous-Move Games I OHs || Printable
  • Lecture 2a: Rothschild's payoffs. OHs || Printable
  • Reading: Marks on Competition and Common Property.
• Lecture 3: Sequential-Move Games OHs || Printable
• Lecture 4: Simultaneous-Move Games II OHs || Printable
• Lecture 5: Combining Sequential and Simultaneous OHs || Printable
• Lecture 6: Decision Analysis: Games Against Nature 1 OHs || Printable
  • Expected Value of Perfect Information on-line (Internet Explorer might not work properly -- use Mozilla or Opera or Safari or Netscape, etc.)
• Lecture 7: Decision Analysis: Games Against Nature 2 OHs || Printable
  • Certainty Equivalents on-line
  • Influence Diagrams: a simpler representation than decision trees. An introduction with references.
• Lecture 8: Mixed Strategies and Unpredictability OHs || Printable
• Lecture 9: Uncertainty and Information 1 OHs || Printable
• Lecture 10: Uncertainty and Information 2 OHs || Printable
  • Lemon Bankers by H.-W. Sinn. Here.
• Lecture 11: Strategic Moves, Credibility, and Commitment OHs || Printable
  • Microsoft and Yahoo! Here.
  • Our reluctance to close doors Here.
  • A paper from Harvard on how lack of credibility forced Boeing to stop preemptive development of a competitor to the Airbus A-380 super-jumbo Here
• Lectures 12, 13: The Prisoner's Dilemma and Repetition OHs || Printable
  • Play the repeated PD on-line.
  • ... and again, here.
  • Discussion of the psychology and complexity of the IPD.
• Lecture 14: Bargaining OHs || Printable
• Lecture 15: Bidding and Auction Design OHs || Printable
  • A game theoretic explanation of the Eligible-Bachelor Paradox.
  • Wireless spectrum auction raises US $19 billion.
  • Bidding for classes at Wharton.
  • Spectrum Auction to Succeed?
  • Experience the Winner's Curse on-line
  • The Winner's Curse in practice
  • About auctions -- Auctus Development, Inc.
  • About auctions. Note that "Dutch auction" can mean a descending-price auction for a single item (traditional meaning) or an sealed-bid auction for multiple items, in which the price paid is the lowest price to shift all the items for sale, or the minimum price. The Google IPO used a Dutch multiple-item auction. See also a "Yankee" multiple-item auction.
  • About Google's IPO.
  • Bidding for the TV rights of the Olympics.
  • Prediction Markets --
    • The Iowa Electronic Markets Here.
    • The Bet2Give prediction market Here.
    • Media Predict harnesses "crowdsourcing" to predict the success or not of new movies, TV shows, novels. You can join in too. Here.
    • Slate brings together the on-line markets for the 2008 US Presidential elections. Here.
    • Market-based probabilities: Intrade (Click on MARKETS on the menu bar.)
    • NY Times article on Intrade here.
    • Market-based probabilities: TradeSports
    • Market-based probabilities: NewsFutures.com
    • Further aggregate predictions at Foresight Exchange
• Lecture 16: Contracting -- Employing, Financing, Franchising OHs || Printable
• Lectures 17, 18: Choosing the Right Game: Co-opetition OHs || Printable

The Term Project:

For an AFR article that started as an SGTM term project, see here.

For an exercise on different payoffs and hidden information: Solomon's judgement.
For guidelines on evaluation of the project, Look here.
For Notes on Writing and the maximum length of the project, Look here.

For the names and topics chosen for the Term Project in Term 1, 2008, Look here.

Exercises:

• The two-thirds exercise 1, Term 1 CE 2008.
• The two-thirds exercise 1, Term 1 2008.
• The two-thirds exercise 1, Term 3 2007.
• The two-thirds exercise 2, Term 3 2007.
• The two-thirds exercise 1, Term 1 2007.
• The two-thirds exercise 1, Term 3 2006.
• The two-thirds exercise 1, Term 1 2006.
• The two-thirds exercise 1, Term 3 2004.
• The two-thirds exercise 1, Term 3 2003.
• The two-thirds exercise 1, Term 1 2003.
• The two-thirds exercise 1, 2002.
• The two-thirds exercise 1, 2001.
• The two-thirds exercise 2, 2001.

Movie clips:

• The Princess Bride
• Dr Strangelove
• The Good the Bad and the Ugly
• -- All available with discussions, Here.

Links to Other Web Sites:

• The Minority Game web page
• Russell Crowe is John Nash in A Beautiful Mind
• Sylvia Nasar, author of John Nash's biography, the book that became the movie, talks about Nash at M.I.T., on 28 Oct 2002. Note: This streaming video is 75 minutes long.
• Mike Spence (Nobel laureate 2001) interviews Tom Schelling, the 2005 Nobel laureate in game theory.
• A piece about the late John Harsanyi, the Nobel laureate in game theory, and Sydney University graduate.
• Readings in Game Theory from the popular press. At www.gametheory.net/news.
• The original RAND corporation piece on competition and cooperation in the NASCAR races. A shorter summary at Slate is here.
• Read Alex Burns' account of Rupert Murdoch's use of game theory in his dealings over thirty years here.
• Course 15.040 -- Game Theory for Managers, Spring 2004, Professor David McAdams' graduate-level course from the MIT Sloan School of Management.
• A piece on Nobel laureate Tom Schelling and the Viet Nam war.

DRIVE:

• The DRIVE Questionnaire
• Explanations of Speculators, Hedgers, Gamblers, Respondents, and Neutrals.
• Plot of the SGTM class 2008, Term 1.
• Plot of the SGTM class 2007, Term 3.
• Plot of the SGTM class 2007, Term 1.
• Plot of the SGTM class 2006, Term 3.
• Plot of the SGTM class 2006, Term 1.
• Plot of the SGTM class 2004, Term 3.
• Plot of the SGTM class 2003, Term 3.
• Plot of the SGTM class 2003, Term 1.
• Plot of the SGTM class 2002.
• Plots of the summer class 2001-02.
• Plots of recent class results,

A growing glossary:

• On-line glossary

Exercises A -- Strategic Decision Making OHs || Printable

Exercises B -- Credible Commitments OHs || Printable

Exercises C -- Repetition and Reputation OHs || Printable

Exercises D -- Bargaining OHs || Printable

Exercises E -- Tenders, Auctions, and Bidding OHs || Printable

Exercises F -- Choosing the Right Game OHs || Printable

The Pennzoil Case.

Toys Galore

Howe Properties

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Last Updated 27 June, 2007

Robert Marks, bobm@agsm.edu.au