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Strategic Decision Making
UoS Code ECON6025
Credit points 6
Offered Semester 1
Prerequisites ECON5001 or ECOF5806 or ECOF6080
Corequisites
Prohibitions
Assumed Knowledge
Additional Information
Lectures 3 hrs per week
Assessment 2 mid semester exams, final exam, tutorial assignments, participation
Description Decision makers face two types of uncertainty: uncertainty about the state of nature (how much oil is in an oilfield) and uncertainty about the strategic behaviour of other decision makers (how many oil wells they will drill). This unit of study focuses on strategic uncertainty and the uses decision makers can make of the concepts of game theory to guide their decisions. Game theory studies situations where a) agents have conflicts of interests and b) agents can take actions that directly affect their payoffs and the payoffs of others. A very broad range of applications from business and economics fit the above description and therefore can be studied by the methods of game theory. Applications include, firm pricing and output decisions, market entry and exit, hold-up, collusion, bargaining, auctions, and signalling.