Competitive Dynamics: Strategy and Tactics

Course Number 1252

Professor Dennis Yao
Winter, 20 sessions
Paper

Educational Objectives

The objective of this course is to develop a student's ability to make good decisions in settings defined by competitive interactions. This ability is critical for developing dynamically consistent strategies and making superior moves given an existing business strategy.

The course is designed to both build a student's intuitive grasp of such interactions as well as to provide a set of concrete tools-predominately game theory-to discipline and refine that intuition. Game theory models are potentially powerful tools for managers who make decisions involving competitive interactions, but the application of these tools to complex competitive settings is quite challenging. Much of the challenge in using such models is that the models are simplifications of the underlying competitive situation. A primary goal of this course is to help students develop the ability to both adapt and create models of strategic interactions in support of decision making.

Course Organization

TThis course builds on the ideas developed in the competitive dynamics module of the Strategy RC. Strategic interactions are explored in settings ranging from a choice of business strategy to narrower decisions involving particular elements of that strategy such as pricing, product introduction, and organization design choices. Some topics covered by the course include price wars, first-mover advantages, the value of maintaining options versus making commitments, strategic alliances, signaling, and the dynamics of reputation building.

The course progresses from simpler simultaneous-choice interactions to multiple-round sequential interactions where competitors have competitively-relevant private information. Within that structure is another progression from tightly defined competitive settings to open-ended settings typically found in a general strategy case study. This progression allows the students to focus on the underlying concepts and techniques before applying them to more complex contexts. Cases are the primary vehicle for learning, but many sessions involve computer and non-computer games which motivate and develop the underlying theory. The supervised paper project provides the students with an opportunity to further develop their skill in the art of identifying and then analyzing competitive dynamics interactions.

Course Focus

This course may be of interest to students who expect to be involved in making decisions that involve strategic interactions. It should be of particular interest to future consultants and strategic planners, but should also be of interest to anyone involved in direct competitive interactions.