Strategy has proved useful in many areas of economics, business, political science, law, and social psychology. This course is an interaction of game theory, economics and strategic management.

Prerequisites

If taken as part of a BSc degree, courses which must be passed before this course may be attempted: EC1002 Introduction to economics and either MT105a Mathematics 1 or MT1174 Calculus.

Topics covered

• Basic game theory
• Oligopoly competition
• Analysis of market structure
• Collusion
• Strategic Alliances
• Organisation design
• Competitive dynamics
• Strategic asymmetries
• Value chain analysis and vertical relations
• Vertical integration and transaction cost
• Entry and entry deterrence
• Research and Development
• Technology adoption
• Network Effects

Learning outcomes

If you complete the course successfully, you should be able to:

• use tools of strategic analysis and game theory to value and analyse strategic options in real life

In particular, you should be able to:

• anticipate the actions of a rational (that is, individually profit-maximising) rival and act accordingly.

Assessment

Unseen written examination (3 hrs).

Essential reading

• Cabral, Luis M.B. Introduction to Industrial Organization. MIT Press.
• Besanko, D., D. Dranove, M. Shanley and S. Shaefer. Economics of Strategy. Wiley. or Saloner, G., A. Shepard and J. Podolny. Strategic Management. Wiley.
• Shapiro, C. and H. Varian. Information Rules. HBS Press.
• Articles from Economics and Management journals available online to students will complement the textbooks for the majority of chapters in the subject guide.

Course information sheets

Download the course information sheets from the LSE website.