Introduction of the course
Understanding strategic decision making processes.

Main topics
Upon completion of this course, students will:
1. Be able to build a basis for a good understanding of the logical mechanics behind strategic decision making processes,
2. Be able to build a good intuition that enables to to understand events in the real world industry,
3. Be able to build an economic model to analyze strategic interactions between players or decision making agents,
4. Learn how to link game theory concepts, economics modeling, and game theoretic insights.

Basic knowledge of Calculus - derivation and integration

Lecture 1:
• Content: Introduction to Game Theory
• Handout: Lecture notes 1

Lecture 2:
• Content: Games in Normal and Extensive Form, Dominant and Dominated Strategies, Prisoner’s Dilemma
• Reading: Dutta, Chapters 2, 3, 4
• Handout: Lecture notes 2

Lecture 3:
• Content: Nash Equilibrium, Static Games, Simultaneous Move Games: Cournot, Experiment
• Reading: Dutta, Chapters 5, 6
• Handout: Lecture notes 3

Lecture 4:
• Content: Simultaneous Move Games Cont’d: Cournot and Bertrand, Experiments
• Handout: Lecture notes 4

Problem Set 1: Issued, Deadline: one week later

Lecture 5:
• Content: Pure Strategies and Mixed Strategies, Applications: Natural Monopoly and Others
• Reading: Dutta, Chapters 7, 8
• Handout: Lecture notes 5

Lecture 6:
• Content: Sequential Move Games, Stackelberg, Comparison of Simultaneous vs Sequential Move Games, First and Second Mover Advantages
• Reading: Dutta, Chapters 6 Cont’d and 11
• Handout: Lecture notes 6

Problem Set 2: Issued, Deadline: one week later

Lecture 7:
• Content: Subgame Perfection, Backward Induction, R&D Investment Games
• Reading: Dutta, Chapters 11, 12 and 13
• Handout: Lecture notes 7

Lecture 8:
• Handout: Lecture notes 8

Simulation Study will be issued, Deadline: one week later

Lecture 9:
• Content: Finitely and Infinitely Repeated Games, Dynamic Games: Stability of Cartels (Punishment Strategies)
• Reading: Dutta, Chapters 14, 15 and PRN, Chapter14, pp. 323-337
• Handout: Lecture notes 9

Lecture 10:
• Content: Multi-Stage Games: Location, Product Variety
• Reading: PRN, Chapter 7, pp. 130-139
• Handout: Lecture notes 10

Problem Set 3: Issued, Deadline one week later

Lecture 11:
• Content: Preemption and Deterrence
• Reading: PRN, Chapter12, pp. 265-287
• Handout: Lecture notes 11

Lecture 12:
• Content: Mergers
• Reading: Dutta, Chapter 13 and PRN, Chapter16
• Handout: Lecture notes 12

Lecture 13:
• Content: Auctions, Different Auction Formats, Revenue Equivalence Theorem, Winner’s Curse, Review Session
• Reading: Dutta, Chapter 23 and PRN, Chapter 25, pp. 660-674
• Handout: Lecture notes 13

FINAL EXAM: date TBA
120 minutes, comprehensive.

Lecture, Simulation game, Exams

Postechians' core values
Cultivating interdisciplinay knowledge
Build abilites of convergent and creative thinking
Nurture self-management