UNIVERSITY OF CALIFORNIA BERKELEY

Haas School of Business

MBA 211 Game Theory

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Course Objectives
This cou se is a su 9e- of 1he (ain i.eas an. 1echni:ues of !a(e81heo e1ic anal-sis ela1e. 1o +a !ainin!; conflic1; an. ne!o1ia1ion* As such; 1he cou se e(phasi<es 1he i.en1ifica1ion an. anal-sis of a che1-pal s1 a1e!ic si1ua1ions f e:uen1l- occu in! in +a !ainin! si1ua1ions* The !oals of 1he cou se 1o p o9i.e s1u.en1s =i1h a foun.a1ion 1o6 >i? >ii? >iii? Appl- !a(e81heo e1ic anal-sis; +o1h fo (all- an. in1ui1i9el-; 1o ne!o1ia1ion an. +a !ainin! si1ua1ions* Reco!ni<e an. assess a che1-pal s1 a1e!ic si1ua1ions in co(plica1e. ne!o1ia1ion se11in!s* Feel co(fo 1a+le in 1he p ocess of ne!o1ia1ion*

The course has a strong experiential component. Students will repeatedly participate in a variety of strategic situations thereby developing the ability to translate their analyses into practice.

Course Requirements
Re!ula a11en.ance in class o If -ou canno1 a11en. fo an- eason; I as, 1ha1 -ou con1ac1 (e 1o le1 (e ,no=*

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%a 1icipa1ion o 'uch of 1he lea nin! in 1he class co(es f o( -ou ac1i9e con1 i+u1ion; so ea.in! an. 1hin,in! +efo e class an. ac1i9el- con9e sin! .u in! class a e ,e- in! e.ien1s 1o a successful lea nin! eApe ience* In o .e 1o +e p epa e. 1o pa 1icipa1e effec1i9el-; -ou shoul. ea. ca efull- 1he in8class eAe cises p io 1o co(in! 1o class* Rea.in! shoul. +e ac1i9e6 as -ou ea.; 1hin, a+ou1 -ou s1 a1e!-; =ha1 assu(p1ions -ou a e (a,in! in .eci.in! on 1his s1 a1e!-* Also 1 - 1o 1hin, a+ou1 ho= o1he s in 1he class (i!h1 .e9elop 1hei s1 a1e!ies* You shoul. +e p epa e. 1o .efen. -ou ac1ions in 1he class usin! lo!ic; e9i.ence; an. calcula1ion* % o+le( se1s o To help -ou 1o !ain ease in appl-in! 1he 1ools of !a(e 1heo e1ic anal-sis 1o 1he si1ua1ions -ou =ill pa 1icipa1e in .u in! 1he class; 1he e =ill +e al(os1 =ee,l- p o+le( se1s an. eflec1ion essa-s* The combination of attendance, participation, and problem sets count for 25% of the course grade. 'i.8se(es1e % o3ec1 >"0B? o To help 1o + i.!e 1he !ap +e1=een 1he anal-1ic 1ools an. 1hei use in 1he eal8=o l. +usiness si1ua1ions; -ou =ill +e as,e. 1o p epa e an Cissue8spo11in! anal-sisD .ue on 1he E1h =ee, of class* This anal-sis; =hich shoul. +e 08$# pa!es lon!; as,s -ou 1o anal-<e a eal8=o l. issue C ippe. f o( 1he hea.linesD =he e 1he 1echni:ues of !a(e 1heo e1ic anal-sis (i!h1 +e f ui1full- applie. 1o ai. in .e9elopin! s1 a1e!-* You =ill +e as,e. 1o (a,e a $# (inu1e p esen1a1ion of 1he issue -ou chose an. -ou anal-sis .u in! class* Final % o3ec1 >0#B? o The final p o3ec1; =hich is 1he Ccaps1oneD co(ponen1 1o 1he class; as,s -ou 1o fin. an issue o si1ua1ion of s1 a1e!ic ele9ance =he e -ou can + in! 1o +ea a 9a ie1- of i.eas an. 1echni:ues .e9elope. .u in! 1he cou se* The final p o3ec1 can +e a + oa.enin! an. .eepenin! of 1he issue8spo11in! anal-sis -ou .i. ea lie o can +e on a co(ple1elsepa a1e issue* A!ain; -ou a e f ee 1o =o , in ! oups* One81hi . of -ou ! a.e fo 1his p o3ec1 is .e1e (ine. +- a $# (inu1e o al p esen1a1ion .u in! 1he $01h =ee, of class* The e(ainin! 1=o81hi .s of -ou ! a.e fo 1he p o3ec1 is .e1e (ine. +- a $#8"# pa!e = i1e8up of -ou anal-sis* The pa!e li(i1 is +ase. on a .ou+le8space. pape eAclusi9e of an- 1a+les o eAhi+i1s -ou =ish 1o inclu.e*

Texts
Re:ui e.6 @i++ons; R*; Game Theory for >He eaf1e @? pplied !conomists, % ince1on Uni9e si1- % ess; $55"*

@i++onsF +oo, is a (uch (o e (a1he(a1icall- i!o ous in1 o.uc1ion 1o !a(e8 1heo e1ic anal-sis* Ghile @i++onsF e(phasis is on 1eachin! econo(is1s 1he

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+asic 1ools of !a(e 1heo -; ea.e s see,in! (o e anal-1ic s1 uc1u e =ill fin. 1he 1eA1 in9alua+le* HiAi1; A* an. B* Nale+uff; The rt of Strategy; GG No 1on; "##I >He eaf1e HN? A 9e - ea.a+le in1 o.uc1ion 1o 1he (ain i.eas in !a(e 1heo - an. 1hei applica1ion 1o eal8=o l. si1ua1ions* Op1ional6 HiAi1; A* an. B* Nale+uff; Thin"ing Strategically, GG No 1on; $55$* Co9e s (uch 1he sa(e (a1e ial as The rt of Strategy* The eAa(ples a e (o e .a1e.; an. 1he focus is (o e on co(pe1i1ion*

Cou sepac, a9aila+le on S1u.-*ne1* Rea.in!s con1aine. in 1he cou sepac, =ill +e .eno1e. +- CCD in 1he assi!n(en1s +elo=*

Course Structure
'os1 class sessions =ill consis1 of +o1h Chan.s8onD eApe iences in s1 uc1u e. s1 a1e!ic si1ua1ions as =ell as lec1u es a+ou1 1he 1heo - un.e l-in! 1hese si1ua1ions* Hiscussion ela1in! eApe iences in s1 uc1u e. se11in!s 1o +o1h 1heo - an. p ac1ice a e an essen1ial aspec1 of 1he cou se*

E ectronic C assroom
Apa 1 f o( 1he e:ui e. 1eA1; I =ill p o9i.e all (a1e ials use. in 1he cou se elec1 onicall- 1h ou!h lin,s a1 1he cou se =e+si1e* So(e %o=e %oin1 sli.es; =hich !o in1o (o e .ep1h a+ou1 ce 1ain lec1u e 1opics a e a9aila+le in a.9ance* % o+le( se1s; eApe i(en1s; an. so on =ill also +e .is1 i+u1e. elec1 onicall-* I =ill .is1 i+u1e 9i 1uall- no1hin! on pape ; so p in1 as -ou see fi1 f o( 1he elec1 onic (a1e ials* I encou a!e elec1 onic su+(ission of all (a1e ials inclu.in! co(ple1e. p o+le( se1s; s1 a1e!- (e(os; offline esul1s; an. so on* You a e; of cou se; f ee 1o su+(i1 ha . cop- if -ou li,e* You shoul. feel f ee 1o con1ac1 (e 9ia e8(ail a1 an- 1i(e* I 1 - 1o 1u n a oun. (essa!es fai l- :uic,l-*

!artici"ation
I e:ui e a11en.ance an. pa 1icipa1ion in 1his class* You can eApec1 1o +e col.8calle. 1h ou!hou1 1he cou se; so +e p epa e.* In a..i1ion; pa 1 of -ou pa 1icipa1ion ! a.e .epen.s on -ou pe fo (ance in 1he in8class eApe i(en1s; so i1 pa-s 1o 1a,e 1hese eAe cises 9e - se iousl-*

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Course Out ine

Belo= is an ou1line of 1he cou se 1ha1 ou!hl- co espon.s 1o a class session* I1 is i(po 1an1 1o e(phasi<e 1ha1 1he ou1line is su+3ec1 1o chan!e +ase. on .e(an.; 1i(in! .iffe ences; e1c* 1. Course Overview Rea.in!6 Cou se o9e 9ie= >sli.es?; HN Ch* $ Ta,e a=a-s6 O9e 9ie= of !a(e 1heo -J !oals of 1he cou seJ lens 1h ou!h =hich 1o 9ie= s1 a1e!2. Rights of First Refusal Rea.in!6 NBA F ee A!enc- >eApe i(en1?; C @a(es of S1 a1e!-6 An In1 o.uc1ion; pp* $80 Assi!n(en16 % o+le( se1 $ >.ue +efo e class 7? Ta,e a=a-s6 Fun.a(en1al p inciple of !a(e 1heo -6 loo, fo =a .; eason +ac,J !a(e 1heo e1ic 9e sus Cno (alD op1ions 3. Look Forward, Reason Back Rea.in!6 HN Ch* "; Coo s in 1he $5E#s >casele1?; Loo, fo =a .; eason +ac, >sli.es? Ta,e a=a-s6 Recipe fo anal-<in! s1 a1e!ic si1ua1ions

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. !i"ing is Crucial Rea.in!6 The @a(in! of %ha (aceu1ical %a1en1s >han.ou1?; 'cCain8Schu(e >eApe i(en1? Ta,e a=a-s6 Ti(in! in !a(esJ 1he s1 a1e!- of >non?.isclosu e #. !i"ing in $a"es Rea.in!6 HN Ch 4; @ Ch* $; C @a(es of S1 a1e!-6 An In1 o.uc1ion; pp* /8I; C @a(e Theo - an. Business S1 a1e!Ta,e a=a-s6 Nash e:uili+ iu( %. &rchet'(al )trategic )ituations Rea.in!6 @a(es =i1h Si(ul1aneous 'o9es >sli.es? Assi!n(en16 % o+le( se1 " >.ue +efo e class 0? Ta,e A=a-s6 A che1-pal s1 a1e!ic si1ua1ions =i1h si(ul1aneous (o9esJ lin,s +e1=een co(pe1i1i9e s1 a1e!- an. !a(e 1heo *. )(ectru" &uctions Auc1ionin! 1he Spec1 u( >eApe i(en1? Ta,e A=a-s6 Ho(inan1 s1 a1e!ies; Vic, e- auc1ions +. Prisoners ,ile""as and Free-Rider Pro.le"s Rea.in!6 HN Ch* 7 pp* /48E$; Ho(inance >sli.es? Ta,e a=a-s6 A che1-pal s1 a1e!ic si1ua1ions =i1h .o(inan1 s1 a1e!iesJ Csol9in!D social .ile((as /. Building 0ental 0odels Rea.in!6 C Co(pe1i1o Anal-sis6 An1icipa1in! Co(pe1i1i9e Ac1ions Ta,e a=a-s6 Co(pe1i1ion f a(e=o ,; +eha9io al anal-sis; co(pe1i1o anal-sis 11. OP2C Rea.in!6 HN Ch /; O%EC >eApe i(en1? Assi!n(en16 O%EC S1 a1e!- 'e(o >.ue +efo e class E? Ta,e a=a-s6 Lea.e ship; s1 a1e!-; an. plannin! in .-na(ic en9i on(en1s 11. !acit Coordination Rea.in!6 HN Ch* 7 pp* E"8$#$; @ Ch* "; H-na(ic @a(es >sli.es? Ta,e a=a-s6 Usin! 1h ea1s an. p o(ises 1o c ea1e coope a1ion; li(i1s 1o coope a1ion 12. Coordination in Practice3 $2 v 4estinghouse Rea.in!6 C @E 9 Ges1in!house Ta,e a=a-s6 % ac1ical i(ple(en1a1ion of coope a1ion s1 a1e!ies In p epa in! 1he case; please ans=e 1he follo=in! :ues1ions6 $* Is 1he 1u +ine +usiness a !oo. one 1o +e inK "* Gha1 a e 1he sou ces of co(pe1i1i9e a.9an1a!e fo @EK

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13. Co""it"ent in Practice3 Browser 4ars Rea.in!6 HN Ch* E; C A B ief His1o - of 1he B o=se Ga s Ta,e a=a-s6 % ac1ical i(ple(en1a1ion of co((i1(en1 s1 a1e!ies In p epa in! 1he case; please ans=e 1he follo=in! :ues1ions6 $* Gh- .i. IE o9e 1a,e Ne1scape in (a ,e1 sha eK "* Hi. +un.lin! pla- a oleK If so; ho=K 7* Gas 1his an effec1i9e s1 a1e!- fo 'ic osof1K 1 . Co""it"ent and Coordination in Practice3 OP2C ,e.rief Rea.in!6 HN Ch* $7 Ta,e a=a-s6 % ac1ical lea.e ship; s1 a1e!-; an. plannin! in .-na(ic en9i on(en1s 1#. 1%. 0id-se"ester (resentations 0id-se"ester (resentations

1*. Princi(les of Bargaining Rea.in!6 HN Ch* $$; Ba !ainin! >sli.es?; 'LB >eApe i(en1? Assi!n(en16 % o+le( se1 4 >.ue +efo e class $$? Ta,e a=a-s6 ,e- aspec1s of +a !ainin! s1 a1e!-; a! eein! 1o p inciples; Nash +a !ainin! solu1ion 1+. Rea.in!6 HN Ch* 5; @ues1 Spea,e 6 TBH* $a"e !heor' in Platfor"s

1/. 5udo )trategies Rea.in!6 &u.o econo(ics >eApe i(en1?; C &u.o in Ac1ion Ta,e a=a-s6 Li(i1e. co((i1(en1 as co(pe1i1i9e a.9an1a!e 21. 6enture Ca(ital Financing Rea.in!6 HN Ch* $#; Ven1u e Capi1al Financin! >eApe i(en1? Ta,e a=a-s6 S1 uc1u in! auc1ions 1o c ea1e2cap1u e 9alue; op1i(al +i..in! in auc1ions 21. &uction ,esign Rea.in!6 Auc1ions >sli.es? Ta,e a=a-s6 S1 a1e!ic e:ui9alence; 1he e9enue e:ui9alence 1heo e( 22. 4ars of &ttrition Rea.in!6 C Hol. o Fol.K The Ga of A11 i1ion; C En.8@a(e S1 a1e!ies fo Heclinin! In.us1 ies Assi!n(en16 % o+le( Se1 0 >.ue +efo e class $7?

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Ta,e a=a-s6 Usin! 1he RET; !a(e 1heo - an. eAi1 s1 a1e!ies; eco!ni<in! =a s of a11 i1ion 23. Pricing for Profita.ilit' in Online 0arkets Rea.in!6 E8 e1ail p icin! >eApe i(en1?; A Hash+oa . fo Online % icin! >C'R A 1icle? Ta,e a=a-s6 Hi1 an. un p icin!; op1i(al p icin! 2 . !he )trateg' of 7ncertaint' Rea.in!6 HN Ch* 0; 'iAe. s1 a1e!- >sli.es? Ta,e a=a-s6 (iAe. s1 a1e!- e:uili+ iu(; s1 a1e!ic unce 1ain1-; eAploi1in! 1en.encies; 9olun1ee Fs .ile((a 2#. )ignaling in &ction Rea.in!6 HN Ch I; Value of e.uca1ion >eApe i(en1? Ta,e a=a-s6 C e.i+le si!nals; =ha1 (a,es a !oo. si!nal; +eliefs 2%. )ignaling in !heor' Rea.in!6 Si!nalin! >sli.es? Ta,e a=a-s6 He1e (inin! c e.i+le si!nals; assessin! si!nals 2*. 4hat 0akes 0arkets !i( Rea.in!6 Social Lea nin! >sli.es?; Repu1a1ion in Online 'a ,e1s >C'R A 1icle? Ta,e a=a-s6 Info (a1ion casca.es; epu1a1ional loc,8in 2+. 2/. 31. Catch-u( Final (ro8ect (resentations Final (ro8ect (resentations

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