General Information
Game theory is a field of study that helps us understand decision making in strategic situations. In addition to being an important methodology within the economics discipline, it also gives insights into pricing and management strategies used by a business. Furthermore, game theory has wide-ranging applications in areas such as international relations, political science and military strategy. Much of game theory involves the interaction of decision makers where there is an asymmetry of information. Thus, the study of game theory can provide insights into how decision makers act when there is some important information that they cannot directly observe.
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Details
Academic unit: Bond Business School Subject code: ECON13-301 Subject title: Game Theory and Strategic Decision Making Subject level: Undergraduate Semester/Year: January 2024 Credit points: 10.000 -
Delivery & attendance
Timetable: https://bond.edu.au/timetable Delivery mode: Standard Workload items: - Seminar: x12 (Total hours: 24) - Seminar 1
- Seminar: x12 (Total hours: 24) - Seminar 2
- Personal Study Hours: x12 (Total hours: 72) - Recommended study time & reviewing materials
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. -
Resources
Prescribed resources: Books
- Dixit, Avinash K.,Skeath, Susan,McAdams, David (2020). Games of Strategy. 5th, W.W. Norton & Company 768
iLearn@Bond & Email: iLearn@Bond is the Learning Management System at Bond University and is used to provide access to subject materials, class recordings and detailed subject information regarding the subject curriculum, assessment, and timing. Both iLearn and the Student Email facility are used to provide important subject notifications.
Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student.
To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au
Class recordings: The primary workload items for this subject will be recorded for the purpose of revision.
These recordings are not a substitute for attending classes. Students are encouraged to attend all sessions as there may be instances where a session is not recorded due to the presence of a guest speaker, the inclusion of sensitive or protected content, or technical issues. Students are advised not to rely solely on these recordings for revision.
See the Recording policy for further details.
| Academic unit: | Bond Business School |
|---|---|
| Subject code: | ECON13-301 |
| Subject title: | Game Theory and Strategic Decision Making |
| Subject level: | Undergraduate |
| Semester/Year: | January 2024 |
| Credit points: | 10.000 |
| Timetable: | https://bond.edu.au/timetable |
|---|---|
| Delivery mode: | Standard |
| Workload items: |
|
| Attendance and learning activities: | Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. |
| Prescribed resources: | Books
|
|---|---|
| iLearn@Bond & Email: | iLearn@Bond is the Learning Management System at Bond University and is used to provide access to subject materials, class recordings and detailed subject information regarding the subject curriculum, assessment, and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au |
| Class recordings: | The primary workload items for this subject will be recorded for the purpose of revision. These recordings are not a substitute for attending classes. Students are encouraged to attend all sessions as there may be instances where a session is not recorded due to the presence of a guest speaker, the inclusion of sensitive or protected content, or technical issues. Students are advised not to rely solely on these recordings for revision. See the Recording policy for further details. |
Enrolment requirements
| Requisites: |
Nil |
|---|---|
| Assumed knowledge: |
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge. Assumed Prior Learning (or equivalent):Possess demonstrable knowledge in algebra and calculus to the level of a unit such as STAT11-112 or STAT71-112. |
| Restrictions: |
Nil |
Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Demonstrate an understanding of games in pure and mixed strategies.
- Explain the game theoretic concepts of uncertainty, information and strategic moves.
- Explain the characteristics and application of repeated games and associated trigger strategies.
- Apply mechanism design to business applications such as pricing and project management.
- Critically analyse the various forms of game theoretic bargaining.
Generative Artificial Intelligence in Assessment
The University acknowledges that Generative Artificial Intelligence (Gen-AI) tools are an important facet of contemporary life. Their use in assessment is considered in line with students’ development of the skills and knowledge which demonstrate learning outcomes and underpin study and career success. Instructions on the use of Gen-AI are given for each assessment task; it is your responsibility to adhere to these instructions.
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Assessment details
Type Task % Timing* Outcomes assessed Paper-based Examination (Limited Open) Comprehensive final examination. 40.00% Final Examination Period 1,2,3,4,5 Paper-based Examination (Limited Open) Short answer questions. 30.00% Week 7 (Mid-Semester Examination Period) 1,2,3 Skills Assignment This assignment includes analytical applications of concepts from the subject. This is an individual assignment. 15.00% Week 5 1,2 Skills Assignment This assignment includes analytical applications of concepts from the subject. This is an individual assignment. 15.00% Week 10 3,4,5 - * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
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Assessment criteria
Assessment criteria
High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment. Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
| Type | Task | % | Timing* | Outcomes assessed |
|---|---|---|---|---|
| Paper-based Examination (Limited Open) | Comprehensive final examination. | 40.00% | Final Examination Period | 1,2,3,4,5 |
| Paper-based Examination (Limited Open) | Short answer questions. | 30.00% | Week 7 (Mid-Semester Examination Period) | 1,2,3 |
| Skills Assignment | This assignment includes analytical applications of concepts from the subject. This is an individual assignment. | 15.00% | Week 5 | 1,2 |
| Skills Assignment | This assignment includes analytical applications of concepts from the subject. This is an individual assignment. | 15.00% | Week 10 | 3,4,5 |
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
Assessment criteria
| High Distinction | 85-100 | Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. |
|---|---|---|
| Distinction | 75-84 | Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. |
| Credit | 65-74 | Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. |
| Pass | 50-64 | Usually awarded to students whose performance meets the requirements set for work provided for assessment. |
| Fail | 0-49 | Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. |
Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Study Information
Submission procedures
Students must check the iLearn@Bond subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless the Lead Educator grants an extension. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Academic Integrity
Bond University‘s Student Code of Conduct Policy , Student Charter, Academic Integrity Policy and our Graduate Attributes guide expectations regarding student behaviour, their rights and responsibilities. Information on these topics can be found on our Academic Integrity webpage recognising that academic integrity involves demonstrating the principles of integrity (honesty, fairness, trust, professionalism, courage, responsibility, and respect) in words and actions across all aspects of academic endeavour.
Staff are required to report suspected misconduct. This includes all types of plagiarism, cheating, collusion, fabrication or falsification of data/content or other misconduct relating to assessment such as the falsification of medical certificates for assessment extensions. The longer term personal, social and financial consequences of misconduct can be severe, so please ask for help if you are unsure.
If your work is subject to an inquiry, you will be given an opportunity to respond and appropriate support will be provided. Academic work under inquiry will not be marked until the process has concluded. Penalties for misconduct include a warning, reduced grade, a requirement to repeat the assessment, suspension or expulsion from the University.
Feedback on assessment
Feedback on assessment will be provided to students according to the requirements of the Assessment Procedure Schedule A - Assessment Communication Procedure.
Whilst in most cases feedback should be provided within two weeks of the assessment submission due date, the Procedure should be checked if the assessment is linked to others or if the subject is a non-standard (e.g., intensive) subject.
Accessibility and Inclusion Support
Support is available to students where a physical, mental or neurological condition exists that would impact the student’s capacity to complete studies, exams or assessment tasks. For effective support, special requirement needs should be arranged with the University in advance of or at the start of each semester, or, for acute conditions, as soon as practicable after the condition arises. Reasonable adjustments are not guaranteed where applications are submitted late in the semester (for example, when lodged just prior to critical assessment and examination dates).
As outlined in the Accessibility and Inclusion Policy, to qualify for support, students must meet certain criteria. Students are also required to meet with the Accessibility and Inclusion Advisor who will ensure that reasonable adjustments are afforded to qualifying students.
For more information and to apply online, visit BondAbility.
Additional subject information
As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Subject curriculum
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Introduction and General Principles
An introduction to the basic elements of games such as strategies and payoffs. Aspects of games and information asymmetry such as signalling and screening devices are also introduced.
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Simultaneous-Move Games
The concept of a Nash Equilibrium is considered in detail. The successive elimination of dominated strategies is also examined. In addition, concepts of multiple equilibria and best response functions are discussed.
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Sequential and Simultaneous Moves
The use of multi-stage games is explained as well as the conditions under which a first-mover-advantage applies. A variety of applications using the extensive form representation of a game are considered to demonstrate the concept of a subgame perfect equilibrium.
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Mixed Strategies
Mixed strategies with players randomising their moves may sound somewhat counter intuitive, however, this is a very important concept within game theory. An opponent’s indifference property of mixed strategy equilibria is examined.
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Uncertainty and Information
Expected utility theory can be used to consider risk-averse decision-makers. The various issues associated with imperfect information such as screening and signalling are explored. Also, the circumstances under which a separating equilibrium or a pooling equilibrium may emerge are examined.
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Strategic Moves
The incentives that influence players to manipulate the rules of the game are examined. The credibility problem with regard to commitment, threats and promises is also considered as well as various ways of gaining or losing credibility.
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Repeated Games
For economists, repeated games without a predetermined length are particularly appealing since they provide a framework that is suitable for analysing oligopolistic interactions. The circumstances under which a grim strategy can support a collusive equilibrium is explored.
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The Prisoner's Dilemma and Repeated Games
Basic game structure is considered with all possible solutions in the situations of prisoner’s dilemma. These are mainly in terms of repetitions (finite, infinite, games of unknown length and general theory applications), penalties and rewards and leadership aspects. In addition, some real-world dilemmas and their solutions are also discussed. The real world examples may include Governments Competing to Attract Business; Labour Arbitration; Evolutionary Biology and Price Matching.
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Mechanism Design
The Principal-Agent problem is considered, including situations under which a principal can offer the agent an optimal contract when the principal does not have full information. The participation constraint and the incentive compatibility constraint are also considered.
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Brinkmanship
The concept of brinkmanship is examined by applying game theory to the Cuban Missile Crisis. This provides a good example of game theory where the player is uncertain as to what type or nature of the competing player.
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Bargaining
Game theory’s cooperative and the non-cooperative approaches to bargaining are explored, as is the traditional Nash axiomatic approach to bargaining. This approach has been widely used by labour economists looking at the relationship between employers and unions.