This course provides an introduction to strategic thinking and to powerful tools and approaches for managerial decision-making. We will apply game theory to solve management problems and to determine optimal courses of action for decision makers. In particular, the course will cover the fundamentals of game-theoretical analysis as it applies to managerial decision-making problems. Game Theory is a structured way of analyzing strategic interactive situations. It is basic to the understanding of market competition among large firms, the designing of incentive contracts, bidding at auctions, bargaining, and other similar problems central to economics and business.
This course builds on course 5511 Strategic Thinking and Analysis I and will focus on games with incomplete/imperfect information, and cover topics and strategic problems like signaling and cheap talk, herding, and information cascades, reputation, private value auctions, and common value auctions.