SEMESTER: Summer 19
COURSE NUMBER: EWMBA 211-1
This course is dual listed with the EMBA program and taught in an EMBA Block schedule.
COURSE TITLE: Game Theory
UNITS OF CREDIT: 2 Units
INSTRUCTOR: Shachar Kariv and Steve Tadelis
E-MAIL ADDRESS: kariv@berkeley.edu and stadelis@berkeley.edu
MEETING DAY(S)/TIME: TBD
PREREQUISITE(S): None
CLASS FORMAT: The class is comprised of lectures and discussion.
REQUIRED READINGS: Most readings will be in bCourses.
The only required textbook: Steven Tadelis, Game Theory: An Introduction. Princeton University Press
These books are lighter reading on business and game theory:
Avinash Dixit and Barry Nalebuff, The Art of Strategy. WW Norton.
Adam Branderburger and Barry Nalebuff, Co-opetition. Currency Doubleday.
BASIS FOR FINAL GRADE: Take Home Final Exam (100%)
ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: Game theory is about what happens when decision makers (spouses, workers, managers, presidents) interact. In the past fifty years, game theory has gradually became a standard language in economics. The power of game theory is its generality and (mathematical) precision, and because game theory is rich and crisp, it is applicable to many business situations. But the spread of game theory outside of economics has suffered because of the misconception that it requires a lot of fancy math.
A typical question is what is game theory good for, or more precisely, is game theory meant to predict what decision makers do, to give them advice, or what?! The answer is that (only) the tools of analytical game theory can be used to predict, postdict (explain), and prescribe, taking into account that even if game theory is not always accurate, descriptive failure is prescriptive opportunity.
As Robert J. Aumann (2005 Nobel Economics Laureate “for having enhanced our understanding of conflict and cooperation through game-theory analysis”) said “... game theory is a sort of umbrella or ‘unified field’ theory for the rational side of social science, where ‘social’ is interpreted broadly, to include human as well as non-human players (computers, animals, plants).” We will show that game theory is not just a normative theory (how people ought to choose), but also as a descriptive theory (how people actually choose) and even as a prescriptive theory (as a practical aid to choice).
BIOGRAPHICAL SKETCH:
Professor Shachar Kariv