An Introduction to Game Theory

“Game Theory”, or the science of strategy, is a big topic that leads in many fascinating directions. This post will provide a basic understanding of what Game Theory 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.

My advice for you is to watch this video, and then choose one (or more) of the additional readings.

 

Lecture handout: Game Theory*

I like to follow the lecture on Game Theory with an interactive session on Oligopoly.

  • I also utilise the following at the start and end of the Game Theory lecture: Oligopoly Game 42 and “Cheating for a £20”.

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.

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  • 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

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:

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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.

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