In this course, we will study the interactions among stakeholders (decision makers, agents) in several real-world business operation situations, and the resulting dynamics in a market environment. Advances in information technology further enrich and broaden these interactions, by increasing the degree of connectivity between different parties involved in a business. Given that each stakeholder is a part of a complex web of interactions, not only interactions among stakeholders play an integral role in any decision and its consequence but also any decision and action taken by a stakeholder impacts multiple entities that interact with or within the stakeholder, and vice versa. Ignoring these interactions could lead to unexpected and potentially very undesirable outcomes.
Our main tool of analysis in this course will be Game Theory. Through the course, we expect to have following learning outcomes:
• Understand game theory models and related concepts
• Analyze game theory models: Computing equilibria
• Understand the classifications of interactions among stakeholders
• Use above models and concepts into some applications in various disciplines, not only in business but also in engineering field.

IMEN261 Introduction to Operations Research, SOSC321 Principles of Economics (Not necessary)

2 Exams (30% & 40%) + Term Project (10%) + Homework (15%) + Participation (5%)

* Drew Fudenberg, Game Theory, MIT Press, 1991
* Hal Varian, Microeconomic Analysis, W.W. Norton & Company, 1992
* Feryal Erhun and Pinar Keskinocak, Game Theory in Business Applications, Lecture Notes
* Gerard Cachon and Serguei Netessine, Game Theory in Supply Chain Analysis, Lecture Notes
* Gerard Cachon, Supply Chain Coordination with Contracts, Lecture Notes
* Michael Bowling and Manuela Veloso, An analysis of Stochastic Game Theory for Multiagent Reinforcement Learning, Lecture Note

1. (Week 1) Introduction of Game Theory
2. (Week 1-2) Static Game of Complete Information : Cournot Competition, Bertrand Competition, etc.
3. (Week 3-5) Dynamic Game of Complete Information : Stackelberg Competition, Repeated Game, Imperfect Information, Stochastic Game etc.
4. (Week 6-7) Business Applications Part 1 : Supply Chain Coordinations (Quantity Discount, Revenue Sharing, Buy Back, etc.)
5. (Week 8-9) Static Game of Incomplete Information : Bayesian Game, Asymmetric Information Game, Auction etc.
6. (Week 10-11) Dynamic Game of Incomplete Information : Signaling Game, etc.
7. (Week 12-14) Business Applications Part 2 : Principal Agent Problems, Mechanism Design etc.
8. (Week 15) Term Project Presentations

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