MANAGERIAL DECISION MAKING

The course introduces the main concepts of strategic thinking, unveiling the economics of strategy. The analysis is extended to game theory, illustrating how it plays out in practice. Game theory is concerned with decision making in social and strategic interaction and is a core analytical framework in all social sciences, particularly in business economics. The course introduces the main concepts and tools of game theory and applies them to actual management tasks with and without strategic interaction. Thus the course will specify concepts such as strategies, payoffs, and information conditions in static and dynamic games, along with specific applications that aim to capture special management problems like corporate governance, auditing, mergers and acquisitions, and termination of joint ventures.

None.

Knowledge and understanding: The course will offer key theoretical tools to recognize and analyze situations of strategic interaction. Hence, will enhance the understating of economic and social phenomena within and outside firms and other organizations. Applying knowledge and understanding: The students will be able to define predictions about subjects’ behavior involved in situations of strategic interactions Making judgements: We expect students to be able to assess the sustainability and effectiveness of arrangements meant to govern economic relationships within organization as well as outside them, highlighting their strengths and weaknesses. Moreover, students would be able to get insights about occurrence of specific economic and social phenomenon. Communications Skills: This course will give the students the possibility to acquire and understand major terms and concepts in order to communicate their ideas, proposals, analysis and critical reasoning in an appropriate way, but at the same time being able to convey effectively insights and economic implications to a non-specialized audience. Learning skills: This course will contribute to empower learners giving them very versatile tools that can be applied to many social and economic contexts. They can also be combined with knowledge from other disciplines to provide more accurate or alternative analysis.

Utility and Choice. Uncertainty and Strategy. Decision making under strategic uncertainty: understanding the problem and its implications. The game-theoretic approach. Sequential and static games. Backward Induction. Equilibria in pure and mixed strategies. Sequential Rationality. Bargaining. Auctions. Repeated Games. Cost. Economic and Opportunity Cost. Applications to Managerial Decision Making.

J. Watson, “Strategy”, Norton (latest edition). Handouts and other supplementary material (distributed via the web page of the course).

Lectures Practice Classes/Case studies

The student will be evaluated on the basis of continuous assessment (70%) and a final exam (30%). The 70% accounting for continuous assessment is made of 20% class participation, i.e., contributions to class discussions, and the remaining 50% comes from the discussion of selected case studies, combining individual and group work.

Pass the exam and an interview.