Course content

The course trains the student in systematic strategic thinking in typical decision situations. One goal of the course is to create an understanding of how other people or organizations act in different decision situations. The course introduces into important game-theoretical concepts, methods and simulation situations with an emphasis on examples and active training / learning in the classroom. The course provides especially theoretical and practical training in strategic decisions related to industrial innovation, such as, various types of investment decisions, decisions about the development of new products etc. when the decision maker must take into account competitors' strategic goals and actions. The starting point is the aggregation of multiple agents' preferences and the challenges in collective decision-making. We present game theory models for non-cooperative and cooperative games, Nash equilibrium. Furthermore, we look at issues where the purpose is to simulate mechanisms to maximize the preferences across actors (agents in the game). Furthermore, we look at the distribution of scarce resources between self-centered agents, and which provides an introduction to auction theory. - Definition of games in a strategic industrial innovation context Static games - Definition of dominant strategies - Nash equilibrium - Dynamic games with full access to information - Repeating games Briefly about contract theory in a game theory setting including short-term contracts versus long-term contracts.

Learning outcome

After the completion of this course the candidate will have knowledge about:

- the basic principles of game based strategic decisions

- which techniques from game theory can be used in specific strategic situations

- type of intelligent players and game models and their characteristics

- how agents make strategic decisions agent communication language and interaction between agents.

After the completion of this course the candidate will have the following skills:

- decide which type of game model is suitable for which type of problems / tasks

- design good forms of interaction (eg negotiations or auctions) between players in different types of games (cooperative and non-cooperative, repetitive games, etc.)

After the completion of this course the candidate will have the following general competence:

- develop an understanding of the complexity of real strategic decisions in industrial contexts.

Learning methods and activities

Lectures, role-play and simulations in the classroom, self-study and exercises. Portfolio assessment provides a basis for a final grade in the course. The portfolio includes a written final exam (70%) and work (30%). The result for the parts is stated in% -points, while the grading for the whole folder (the final grade) is indicated with a letter grade (A-F).

Compulsory assignments

• Obligatory assignement

Further on evaluation

Submission of a mandatory empirical written assignment on strategic decision making situation as a group of max three students.

Written four hours exam.

Specific conditions

Required previous knowledge

Admission to the master program

Course materials

Several papers and a book on Game Theory