Course Number 1215
Professor Elon Kohlberg
Fall; Q2; 1.5 credits
We will discuss some of the great ideas of game theory. These ideas help us think about competition at a higher level of abstraction than is common in the MBA class. The downside is that there are no case discussions. The upside is that the ideas allow us to think about many different phenomena as instances of the same principle.
We will strive to emphasize concepts rather than technique. But we will maintain a high standard regarding the logical consistency of our analyses.
Attached is an article written a hundred years ago by the biologist J.B.S. Haldane. It is an almost perfect example of what we are trying to achieve, albeit in a different area of inquiry. Haldane presents a single principle, enunciates it clearly and simply, then applies it to unify a vast number of observations about animals, machines, and organizations. While it would be pretentious to attempt to reach Haldane’s level, still - if you like the article, there is a good chance that you will like the course.
Some of the topics that we will discuss:
- Nash equilibrium
- Backward induction
- Evolutionary stable strategies
- Probability and the law of large numbers
- Conditional probability and Bayes’ rule
- The value of information
- Minmax strategies
- Optimal strategies in poker
- Signaling games
- Adverse selection and moral hazard