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IB3H9-15 Strategic Games: Thinking rationally about business, policy and real life

Department
Warwick Business School
Level
Undergraduate Level 3
Module leader
Despoina Alempaki
Credit value
15
Module duration
10 weeks
Assessment
Multiple
Study location
University of Warwick main campus, Coventry
Introductory description

This is an elective module available for WBS and non-WBS students.

The principal module aims are:

  1. To develop students' theoretical and practical understanding of strategic decisions using tools drawn from economics, game theory, and psychology.
  2. To enable students to interpret social and psychological situations within this framework.
  3. To encourage students to take a broad view of policy decisions that have strategic implications, and to predict the consequences of those policies.

Module web page

Module aims

The principal module aims are:

  1. To develop students' theoretical and practical understanding of strategic decisions using tools drawn from economics, game theory, and psychology.
  2. To enable students to interpret social and psychological situations within this framework.
  3. To encourage students to take a broad view of policy decisions that have strategic implications, and to predict the consequences of those policies.
Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

The syllabus will include such topics as:

  • Definition of strategic situation and equilibrium.
  • Backward induction and rollback equilibrium.
  • Strategic moves and the problem of credibility.
  • Nash equilibrium in pure and mixed strategies.
  • The prisoner's dilemma and the tragedy of the commons.
  • Asymmetric information and unravelling.
  • Screening and Signalling.
  • Matching games and the deferred acceptance algorithm.
  • Bargaining and negotiation.
  • Evolutionary games.
  • Auction theory and the winner's curse.
  • Intrapersonal game.
Learning outcomes

By the end of the module, students should be able to:

  • Understand and deploy the basic concepts of strategic thinking, in a largely non-mathematical way. These concepts include strategy, Nash equilibrium, prisoner's dilemma, backward induction, winner's curse, informational unravelling, and asymmetric information, costly signalling, and matching.
  • Demonstrate logical and critical thinking skills in being able to recognize the potentially counter-intuitive effects of strategic decisions.
  • Recognise the links between situations that differ widely in content but share common underlying strategic structures.
  • Distinguish between the outcome of logical analysis and 'psychological' analysis of strategic situations.
  • Discuss critically the strategic thinking underlying a broad range of decisions taken from all aspects of life.
  • Analyse strategic situations and act so as to achieve optimal outcomes, including negotiations with others, and even with your own future selves.
Indicative reading list

Some useful resources:
Dixit, A. K., Reilly, D. & Skeath, S. (2015). Games of Strategy. Norton. (Fourth edition, but any edition is good).
Schelling, T. (1976). Micromotives and Macrobehaviour. Norton.
Binmore, K. (2007). Game theory: A very short introduction. Oxford University Press.
Roth, A. E. (2015). Who Gets What—and Why: The New Economics of Matchmaking and Market Design. Houghton Mifflin Harcourt.

Subject specific skills

Distinguish between the mathematical and economic concept of the correct strategy, and the 'psychological' concept, meaning what might be the correct strategy given what others are likely to do.
Understand how strategic thinking can influence success in all aspects of life.

Transferable skills

Perspective taking.
Logical analysis.
Presentation skills and argumentation.

Study time

Type Required
Lectures 10 sessions of 1 hour (7%)
Seminars 9 sessions of 1 hour (6%)
Online learning (scheduled sessions) 1 session of 1 hour (1%)
Online learning (independent) 10 sessions of 1 hour (7%)
Private study 48 hours (32%)
Assessment 72 hours (48%)
Total 150 hours
Private study description

Private Study.

Costs

No further costs have been identified for this module.

You do not need to pass all assessment components to pass the module.

Assessment group D7
Weighting Study time
Participation 10% 7 hours

Participation via weekly tasks/quizzes posted on the module's forum and overall
attendance

Examination 90% 65 hours
  • Answerbook Green (8 page)
  • Students may use a calculator
  • Graph paper
Assessment group R2
Weighting Study time
Examination 100%
  • Answerbook Green (8 page)
  • Students may use a calculator
  • Graph paper
Feedback on assessment

Written feedback on the presentation will be provided, focusing on the key learning outcomes, as well as giving feedback on creativity and the general quality of the presentation.

Past exam papers for IB3H9

Courses

This module is Optional for:

  • UIBA-MN34 Law and Business Four Year (Qualifying Degree)
    • Year 3 of MN34 Law and Business Studies Four Year (Qualifying Degree)
    • Year 4 of MN34 Law and Business Studies Four Year (Qualifying Degree)
  • UPHA-L1CA Undergraduate Economics, Psychology and Philosophy
    • Year 3 of L1CA Economics, Psychology and Philosophy
    • Year 3 of L1CC Economics, Psychology and Philosophy (Behavioural Economics Pathway)
    • Year 3 of L1CD Economics, Psychology and Philosophy (Economics with Philosophy Pathway)
    • Year 3 of L1CE Economics, Psychology and Philosophy (Philosophy and Psychology Pathway)
  • UPHA-L1CB Undergraduate Economics, Psychology and Philosophy (with Intercalated Year)
    • Year 4 of L1CG Economics, Psychology and Philosophy (Behavioural Economics Pathway) (with Intercalated Year)
    • Year 4 of L1CH Economics, Psychology and Philosophy (Economics with Philosophy Pathway) (with Intercalated Year)
    • Year 4 of L1CJ Economics, Psychology and Philosophy (Philosophy and Psychology Pathway) (with Intercalated Year)
    • Year 4 of L1CB Economics, Psychology and Philosophy (with Intercalated Year)
    • Year 4 of L1CB Economics, Psychology and Philosophy (with Intercalated Year)
  • Year 3 of UIBA-MN31 Undergraduate Law and Business Studies
  • Year 3 of UIBA-MN32 Undergraduate Law and Business Studies
  • UIBA-MN35 Undergraduate Law and Business Studies with Intercalated Year (3+1)
    • Year 3 of MN35 Law and Business Studies with Intercalated Year (3+1)
    • Year 4 of MN35 Law and Business Studies with Intercalated Year (3+1)

This module is Unusual option for:

  • UPHA-L1CA Undergraduate Economics, Psychology and Philosophy
    • Year 2 of L1CA Economics, Psychology and Philosophy
    • Year 3 of L1CA Economics, Psychology and Philosophy