An Introduction to Game Theory

Game Theory provides a clear and engaging way to study strategic interaction and constitutes a critical foundation for corporate leaders. This module covers the basic terminology and foundational concepts that form the scientific basis for game theory, and then applies them to a range of social and management issues. 

This page provides a basic understanding of what Game Theory (“the science of strategy”) is, and how it can be utilised in management situations. In addition to providing my own course material, I have also attempted to tie into some of the amazing resources that already exist.

Lecture handout: Game Theory*

Activity: Game Theory Worksheet and Obedient Prisoners
  • Other good activities to accompany the Game Theory lecture include: Oligopoly Game 42 and “Cheating for a £20”.
  • I like to follow the lecture on Game Theory with an interactive session on Oligopoly.
  • Here is my attempt to introduce some Game Theory into the classroom.
  • Further reading: “Platform Business for Everything”, in Fisman, R., and Sullivan, T., The Inner Lives of Markets, John Murray Learning, p124-126
  • Further reading: “Game Theory: A Beautiful Mind” Chapter 2 of Rubenstein, A.,  Economic Fables
  • More resources: Axelrod’s Tournament, and RadioLab’s episode on Tit for Tat with forgiveness

Here is a video on finding a Nash equilibrium:

Additional readings

Here are some recommendations, depending on your level of interest and time constraints:

But the Game Theorist’s “bible” is Thinking Strategically” by Dixit, A., and Nalebuff, B (Norton, 1993). This is the one book you need to read, re-read, and master.


Finally, it is great fun to apply Game Theory to popular culture. See Michael Statsny’s discussion of game theory in movies, and a collection of popular cultural references. Here are some of my favourite discussion questions:

I also like these two classic clips from Goldenballs:

Learning Objectives:

  • Become familiar with the key terms used by game theorists and recognise the seminal examples
  • Think in game theoretic terms
  • Apply game theory insights to real world management issues

One Reply to “An Introduction to Game Theory”

  1. It’s been years since I gave this subject serious attention and I’m certain I never read Think Strategically. It’s an addictive subject that can burn you out if you’re not careful.

Comments are closed.