COURSE NUMBER: MBA243.1

COURSE TITLE: DECISIONS, GAMES, AND STRATEGIES

UNITS OF CREDIT: 3

INSTRUCTOR: Thomas Marschak

E-MAIL ADDRESS: marschak@haas.berkeley.edu

CLASS WEB PAGE LOCATION (HTTP URL): http://bspace.berkeley.edu

MEETING DAY(S)/TIME: Tuesday and Thursday 11:00AM - 12:30PM

PREREQUISITE(S): No formal prerequisites. But the concept of an expected value (an average) will be needed.

CLASS FORMAT: A mixture of lectures, class discussions, and classroom experiments.

REQUIRED READINGS: There will be a course reader, handouts prepared by the instructor, and several cases.

BASIS FOR FINAL GRADE: 2/3 weight will be given to the term paper, 1/6 to homework, and 1/6 to class participation.

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:

There are two related themes:

(1) The first half of the course considers  Decision Analysis, which helps a manager  to make a decision  (launching a new product, choosing a new technology, locating a new facility) when he/she will not know how good the decision is until after it's made. The technique helps the decision maker to be consistent with his/her own beliefs about events that have not yet occurred and with his/her own attitudes toward risk.  If you were retained by the decision maker as a consultant, a Decision Analysis might be appropriate. In performing the Analysis, how would you go about probing your client and how would you defend your procedure and your final advice?  The first half of the course aims to answer these questions by developing some basic principles that the client seems likely to accept. We will see that if the client does so, then the client is led to accept the advice provided by the Analysis. To illustrate the ideas, we will use classroom exercises as well as several cases,  Each case will be presented and discussed  by a student team. Some of the cases are Decision Analyses that were actually performed and others are fictitious.  Special attention will be paid to the option of learning more before making a final choice. A talk by a decision-analysis practitioner is planned.

(2) The second half of the course pursues the same theme but now the success of the decision depends on the behavior of one or more opponents.

This time simple game models will be appropriate.  The questions to be addressed include: How should I bid in an auction? What strategy should I use in a bargaining situation? Is it useful to acquire a reputation for toughness in repeated confrontations with the same competitors?

Cases, and classroom (and Computer Lab) exercises, will illustrate the ideas.

In both parts of the course, homework sets using "toy" problems, will help to clarify concepts and techniques.

In the term paper you will take a real-world problem that interests you,

and   will thoughtfully describe (without necessarily carrying it out) a

Decision Analysis of the problem if it's not one that involves opponents, or a simple game analysis if it is.

The course grade will  depend on the term paper,  the homework problems,  and your participation in the case-presentation team to which you are assigned.

BIOGRAPHICAL SKETCH:

Thomas Marschak  has been on the Haas faculty for many years. He is an economist, whose research interests include the economics of efficient organizations. He is concerned, most recently, with the impact of improved information technology on the structure of well- designed organizations.