Game Theory for Managers

An important feature of persons, firms, and countries is that they interact, which may be competitive or cooperative. Game theory (with 10 Nobel prizes) addresses these interactions in a unified way. It is applied widely in fields such as business, economics, law, psychology, and sociology, engineering, computer science, biology, and philosophy.

Take a look at the video and learn more about this minor.

This course will examine the basic ideas of game theory and apply them to all fields in management. Themes and patterns are identified that are common to situations in all fields of management (accounting, finance, marketing, organization, strategy, supply chains, technology), like capacity to think ahead, grasp how others think and behave, commitments, threats and promises, contract design, strategies of signalling, and the emergence of cooperation.

In this course, we aim to achieve therefore three goals:

• Explain the game theoretic logic;
• Apply game theory in diverse fields inside and outside the social sciences;
• Redesign games for better outcomes.

Concepts are developed incrementally to highlight their logic, while no mathematical skills are required beyond the high school level. There is no prior knowledge required.

• Students from the entire Erasmus University Rotterdam, and elsewhere, are welcome.
• Contact hours: 6 (per week)
• Self-study hours: 34 (per week)
• Exam and exam preparation: 20
• All RSM minors have mandatory attendance.

Teaching methods
Lectures, presentation, group assignments, paper.

Teaching materials
Watson, J., Strategy, an Introduction to Game Theory, Norton, 2013.
Sheets will be made available on Canvas.
Supporting material (to be announced).

Method of examination

• Team assignments (8) and presentation (1);
• Written test (individual);
• Paper (individual);
• Participation (individual).

There is a re-sit opportunity for the written test.

Composition final grade

• Assignments (8) and presentation (1) (9x4=36 points, i.e. 36/136 (26,5%))

• Written test (34 points, i.e. 34/136 (25%))

• Paper (30 points, i.e. 30/136 (22%), consisting of 10% draft of Intro and Literature review, 90% final version)

• Participation (18 (classes) x 2 = 36 points, i.e. 36/136 (26,5%))

The grade of the course is based on the total number of points in the following way:
0 when the total number of points is less than 36; (# points – 36)/10 when 36 points or more.