15.025 | Spring 2015 | Graduate

Game Theory for Strategic Advantage



[DSR] = Dixit, Avinash, Susan Skeath, and David Reiley. Games of Strategy. 3rd ed. W. W. Norton & Company, 2009. ISBN: 9780393931129.

1 Introduction

Brandenburger, Adam, and Barry Nalebuff. “The Right Game: Use Game Theory to Shape Strategy.” Harvard Business Review, July 1995.

Smith, Raymond. “Business as a War Game: A Report from the Battlefront.” Fortune 134, no. 6 (1996): 190–92.

[DSR] Chapter 1: Introduction.

2 Rationality

Brandenburger, and Nalebuff. Chapter 3 in Co-opetition. Doubleday Business, 1996. ISBN: 9780385479493.

[DSR] Chapters 2: Basics, 4–4.4: Dominance, Best response, 11.1: Prisoners’ Dilemma, and 11.6: Experimental Evidence.

3 Nash Equilibrium [DSR] Chapters 4.7: Multiple Equilibria, 5.3: Nash Equilibrium, and 5.4: Rationalizability.
4 (Un)predictable Outcomes [DSR] Chapter 7: Mixed Strategies, skip Sections 7.2C and 7.5A.
5 Application: Strategic Trade Policy Krugman, Paul R. “Is Free Trade Passé?The Journal of Economic Perspectives 1, no. 2 (1987): 131–44.
6 Designing Games and Influencing Outcomes

Chevalier, Judith. “When it can be Good to Burn your Boats,” Financial Times, October 25, 1999, p. 12.

[DSR] Chapter 10: Strategic Moves.

7 Backward Induction

Chevalier, Judith. “The Pros and Cons of Entering a Market Surveys Edition,” Financial Times, November 1, 1999, p. 5.

Lieberman, Marvin B., and David B. Montgomery. “First-mover Advantages.” Strategic Management Journal 9, no. S1 (1988): 41–58.

[DSR] Chapter 3: Sequential Moves.

8 Bargaining

Michaels, Daniel. “Dogfight: In the Secret World of Airplane Deals, One Battle Up Close—Boeing, Airbus Vied to Meet Cutthroat Terms of Iberia; Strong Carriers Call Shots—Dangling the Used Car Option,” (PDF) Wall Street Journal, March 10, 2003.

Brandenburger, and Nalebuff. Chapter 4 in Co-opetition. Doubleday Business, 1996, pp. 71–91. ISBN: 9780385479493.

[DSR] Chapter 18: Bargaining.

9 Wars of Attrition Rivkin, Jan W. “Dogfight over Europe: RyanAir (A).” Harvard Business School Case: 9–700–115, June 2000.
10 Team Presentations: Project Proposals No readings.
11 Dynamic Price Competition Brandenburger, and Nalebuff. Chapter 5 in Co-opetition. Doubleday Business, 1996, pp. 131–45. ISBN: 9780385479493.
12 Introduction to Repeated Interaction

Garicano, Luis, and Robert Gertner. “The Dynamics of Price Competition,” Financial Times, October 18, 1999, p. 2.

[DSR] Chapter 11: Prisoners’ Dilemma and Repeated Games.

13 Long-run Relationships

Milgrom, Paul, and John Roberts. “Johnson Controls, Inc.—Automotive System Group: The Georgetown, Kentucky Plants.” Stanford Graduate School of Business Case: BE-9, 1993.

Stewart, James. “Taking the Dare.” The New Yorker, July 1993, pp. 34–39.

14 Application: Tacit Coordination Porter, Michael E. “General Electric vs. Westinghouse in Large Turbine Generators (A).” Harvard Business School Case: 380–128, August 1986.
15 Games with Asymmetric Information [DSR] Chapters 9.1–2: Uncertainty and Information.
16 Introduction to Auctions [DSR] Chapter 17: Auctions.
17 Online Auctions

Clifford, Stephanie. “A Web Shift in the Way Advertisers See Clicks,” New York Times, April 21, 2008.

Angwin, Julia. “The Web’s New Gold Mine: Your Secrets,” Wall Street Journal, July 30, 2010.

Singer, Natasha. “Your Online Attention, Bought in an Instant,” New York Times, November 17, 2012.

18 Designing Auctions and Other Markets

McAfee, R. Preston. “The Greatest Auction in History.” In Better Living through Economics. Edited by John Siegfried. Harvard University Press, 2012. ISBN: 9780674064126. [Preview with Google Books]

Tulis, Tracy. “How Game Theory Helped Improve New York City’s High School Application Process,” New York Times, December 5, 2014.

19 Costly Signaling vs. Cheap Talk [DSR] Chapters 9.3–6: Cheap Talk & Signaling.
20 Credibility and Reputation Kreps, David. Chapter 23 in Microeconomics for Managers. W. W. Norton & Company, 2004, pp. 556–73. ISBN: 9780393976786.
21 Application: Cold War Politics

Schelling, Thomas. Chapters 7 and 8 in Strategy of Conflict. Oxford University Press, 1963. ISBN: 9780195002492.

Dixit, Avinash K., and Susan Skeath. Games of Strategy. W. W. Norton & Company, 1999. ISBN: 9780393974218.

22 Team Project Presentations No readings.
23 Team Project Presentations (cont.) Takeaways from team projects and in-class games.

Course Info

As Taught In
Spring 2015
Learning Resource Types
Lecture Notes
Problem Sets with Solutions