Methods of Strategic Analysis
State Research University Higher School of Economics
Professor: Jonathan Peterson, jrp84627@gmail.com,
Classes: 2nd Module, 2012-2013 academic year
Lecture: 20 hours
Seminar: 16 hours
Office hours: By appointment, Office #806.
Course Description: Game theory is the science of strategic decision-making in situations
where players’ actions are interdependent. It provides a method for identifying optimal strategies
and predicting the outcomes of strategic interactions. Using lectures, assigned readings and
assignments, we develop the basic tools of game theory and then apply them to real-world
situations. This course requires only basic mathematics, but a familiarity with microeconomics
and strategy is helpful.
Course Objectives:
1. Familiarize students with Game Theory to a level that they can solve simple exercises.
2. Increase student’s proficiency in the English language.
3. Train students to use the above insights in analyzing business situations and
opportunities.
Course Website: I have created a website for the course, to which I will regularly post items
regarding the course. https://sites.google.com/site/hsestrategicanalysis/
Course grade components:
1. In-class quizzes and participation 30%
2. Group final paper and presentation 30%
3. Final exam 40%
Details of the grade components:
In-class quizzes and seminar participation:
At the beginning of each class period, I will give a short, multiple-choice quiz that covers the
required reading. The quizzes will be given promptly at the beginning of the class period. You
must be on time to take the quiz.
Final project and presentation: The final deliverable is a small-group paper and presentation on a
real-world application of game theory that you will choose with your group. A one-page
proposal for this paper is due two weeks prior to the presentation and the full paper must be
emailed to me one week after the presentation. More specific instructions for this assignment
will be provided later.
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Groups: You may form groups with anyone in your seminar. Groups should have 2 people.
Contact me if you have trouble forming a group.
Typesetting rules for written work: All assignments must be in English. They must be typeset,
double-spaced, 12 point font, Times New Roman font with one-inch margins (so, no more than
23 lines per page). Coversheets do not count towards the page limit. I have found from previous
classes that approximately 10 percent of students ignore these rules. Please don’t be one of these
students. To be fair to others, violating length rules may lead to a loss of points.
Student numbers: In order to accurately keep track of grades, you will be assigned student a five
digit student number for this course. In addition to your name, you must write it on all
assignments, quizzes and exams. These numbers will also be used when giving out individual
reading assignments for participation in seminars.
Readings
The readings in this course will be the textbook and newspaper articles. The required reading list
is given below for the lectures. The specific readings for the seminars will be newspaper of
magazine articles will be given later on the course website.
Textbook for Lecture:
Thinking Strategically: The Competitive Edge in Business, Politics and Everyday Life, Dixit and
Nalebuff, 1993.
Examples of Articles for Seminars:
1. The right game: Use game theory to shape strategy, Brandenburger and Nalebuff,
Harvard Business Review, July-August 1995, pages 57-71
2. “Paying for PR – but only when it works,” Wall Street Journal, December 17, 2007, 2
pages
3. “New ads will stir up coffee wars,” Wall Street Journal, May 4, 2009, 1 page.
4. “From Seattle, with lattes: And Russian rivals await,” Wall Street Journal, August 31,
2007, 2 pages.
5. “Frontier: Not about to pack its bags,” Business Week, February 20, 2006, 2 pages.
6. “Geox takes on the goliaths of sport,” Business Week, April 14, 2008, 1 page
7. “Rolls Royce’s victory in landing engine job shows industry’s ills,” Wall Street Journal,
January 2, 1996, 2 pages.
8. “Technology titans battle over format of DVD successor,” Wall Street Journal, March
15, 2004, 2 pages.
9. “When hybrid cars collide,” Wall Street Journal, February 6, 2003, 2 pages
10. “DeBeers, Russia wrangle over diamonds,” Wall Street Journal, November 28, 1996, 1
page
11. “Do Sold-Off Corporate Loans Do Worse?” Wall Street Journal, Nov. 19, 2008
Additional, more recent articles will be provided throughout the semester
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Outline of Lectures
1/11/2012
Lecture 1: Introduction
Suggested Reading:
DN: Introduction and 1- Ten tales of Strategy
Lecture 2: Game Theory basics 1: Sequential Games
Required Reading:
DN: 2-Anticipating Your Rival’s Response
8/11/2012
Lecture 3: Game Theory basics 2: Simultaneous Move Games
Required Reading:
DN: 3-Seeing through Your Rival’s Strategy
Epilogue to Part I
Lecture 4: Prisoner’s Dilemma
Required Reading:
DN: 4-Resolving the Prisoner’s Dilemma
15/11/2012
Lecture 5: Commitments 1
Required Reading:
DN: 5-Strategic Moves
The right game: Use game theory to shape strategy, Brandenburger and Nalebuff,
Harvard Business Review, July-August 1995,,
Lecture 6: Commitments 2
Required Reading:
DN: 6- Credible Commitments
22/11/2012
Lecture 7: Mixed Strategies
Required Reading:
DN: 7-Unpredictablity
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Lecture 8: Games of Chicken
Required Reading:
DN: 8-Brinkmanship
The right game: Use game theory to shape strategy, Brandenburger and Nalebuff,
Harvard Business Review, July-August 1995,, page 67
29/11/2012
Lecture 9: Bargaining
Required Reading:
DN: 11-Bargaining
Lecture 10: Incentives
Required Reading:
DN: 12-Incentives
“Paying for PR – but only when it works,” Wall Street Journal, December 17, 2007, 2
pages
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