Game Theory and Economics
|Sites Offered||BRI, HKU, SCZ|
From the CTY Summer Catalog:
Thomas J. Watson, the founder of IBM, once said, “Business is a game—the greatest game in the world if you know how to play it.” In today’s global marketplace, understanding game theory, the branch of mathematics which focuses on the application of strategic reasoning to competitive behavior, is crucial to understanding business and economics.
In this course, students use game theory as a framework from which to analyze a variety of real-world economic situations. Students begin the course by analyzing simple games, such as two-person, zero-sum games, and learn how these games can be used to model actual situations encountered by entrepreneurs and economists. For instance, students may apply the concept of Nash equilibria to find the optimum strategy for the pricing of pizza in the competition between Domino’s and Pizza Hut.
As they acquire an understanding of more complex games, students apply these methods to analyze a variety of economic situations, which may include auctions and bidding behavior, fair division and profit sharing, monopolies and oligopolies, and bankruptcy. Through class discussions, activities, research, and mathematical analysis, students learn to predict and understand human behavior in a variety of real-world contexts in business and economics.