In the list of readings below, D&S = Dixit, Avinash K., and Susan Skeath. Games of Strategy. New York, NY: W. W. Norton & Company, 1999. ISBN: 0393974219.
All students should become comfortable with material assigned in the textbook prior to each class. Students with less background will need to spend more time on this. Non-textbook readings that are most important to prepare for lecture are denoted with (*) or (**). (All readings are very helpful for getting as much as possible from the lecture.)
| LEC # | TOPICS | READINGS |
|---|---|---|
| 1 | Introduction | (*) Smith, Raymond. "Business as a War Game: A Report from the Battlefront." Fortune, September 1996, 190-2. Brandenburger, Adam, and Vijay Krishna. "The Gray Area: Common Sense 0, Strategic Reasoning 6." Harvard Business Review 90, no. 4: 200-201. D&S. Chapter 1. |
| 2 | Rationality? |
Hirshleifer, David. "The Blind Leading the Blind: Social Influence, Fads, and Informational Cascades." Chapter 12 in The New Economics of Human Behavior. Edited by Mariano Tomassi, and Kathryn Ierulli. Cambridge, UK: Cambridge University Press, 1995. ISBN: 0521479495. Lowenstein, Roger. "Exuberance Is Rational." The New York Times Magazine, 11 February 2001. (*) Buffett, Warren. "The Billionaire's Buyout Plan." The New York Times, 10 September 2000. D&S. Chapter 2, and 4 - 4.6. |
| 3 | Equilibrium I | Hobson, Katherine. "The Malls Get Decked: Retailers Minding Too Many Stores." The Street.com, 22 November 2000. Available at the Web site of The Street.com. (*) Peterson, Ivars. "Mating Games and Lizards." Mathematical Association of America, 15 April 1996, (accessed July 12, 2004). Glen, Orie. "Koufax Kicks." SportsJones Magazine, 21 July 1998. D&S. Chapter 4.10 - 4.12, 5 - 5.4, 8.6, 10.3 - 10.4. |
| 4 | Equilibrium II | Garicano, Luis. "Game Theory: How to Make It Pay." Financial Times, 11 October 1999, 2. (*) Garicano, Luis, and Robert Gertner. "The Dynamics of Price Competition." Financial Times, 18 October 1999, 2. D&S. Chapter 3 - 3.7. |
| 5 | Commitment | (*) Chevalier, Judith. "When It Can Be Good to Burn Your Boats." Financial Times, 25 October 1999, 12. Lieberman, Marvin B., and David B. Montgomery. "First-Mover Advantages." Strategic Management Journal 9 (1988): 41-58. Schelling, Thomas. Strategy of Conflict. Cambridge, MA: Harvard University Press, 1963, chapter 10. ISBN: 0674840305.D&S. Chapter 9. |
| 6 | Strategic Substitutes and Strategic Complements | (**) Lecture Note on Strategic Substitutes and Strategic Complements. |
| 7 | Application: Entering a Market | (**) Rivkin, Jan W. "Dogfight over Europe: RyanAir (A)." Boston, MA: Harvard Business School, 2000, Case No. 9-700-115. Chevalier, Judith. "The Pros and Cons of Entering a Market." Financial Times, 1 November 1999, 8-10. |
| 8 | Application: Brinksmanship | Schelling, Thomas. Strategy of Conflict. Cambridge, MA: Harvard University Press, 1963, chapters 7 and 8. D&S. Chapter 13. |
| 9 | Auctions | (*) Michaels, Daniel. "Dogfight: In the Secret World of Airplane Deals, One Battle Up Close - Boeing, Airbus Vied to Meet Cutthroat Terms of Iberia." The Wall Street Journal, 10 March 2003. McMillan, John. "Selling Spectrum Rights." Journal of Economic Perspectives 8 (Summer 1994): 145-62. (*) Lecture Note on Auction Theory. D&S. Chapter 15. |
| 10 | Uncertainty and Information | Loughran, Tim, and Jay Ritter. "The New Issues Puzzle." Journal of Finance 50, no. 1 (1995): 23-51. Easterbrook, Frank. "Two Agency-Cost Explanations of Dividends." American Economic Review 74, no. 4 (1984): 650-9. D&S. Chapter 12. |
| 11 | Reputation and Strategic Irrationality | (*) Kreps, David M. Microeconomics for Managers. W.W. Norton & Company, 2004, chapter 23, pp. 556-73. ISBN: 0393976793. D&S. Chapter 8.1 - 8.5. |