Illinois Tech
Business Economics and Game Theory for Decision Making
Illinois Tech

Business Economics and Game Theory for Decision Making

Course

Gain insight into a topic and learn the fundamentals

Liad Wagman
Priyanka Sharma

Instructors: Liad Wagman

Intermediate level

Recommended experience

41 hours to complete
3 weeks at 13 hours a week
Flexible schedule
Learn at your own pace
Progress towards a degree

What you'll learn

  • The economic concept of elasticity, and how to utilize it in making informed decisions on pricing products.

  • Sources of market power and how firms with market power set prices, segment customers, and customize prices to different segments.

  • Concepts in game theory, including simultaneous games, sequential games, auctions, and adverse selection issues.

Details to know

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Assessments

21 assignments

Taught in English

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There are 6 modules in this course

Welcome to Business Economics and Game Theory for Decision Making! Module 1 introduces the concept of elasticity, and specifically, price elasticity of demand, which quantifies the intricate relationship between price changes and buyer behavior. Price elasticity of demand measures the responsiveness of consumer demand to fluctuations in product prices. Understanding elasticity is paramount in economics, as it empowers businesses and policymakers to make informed decisions regarding dynamic pricing strategies, revenue optimization, and resource allocation. By calculating and analyzing the elasticity of demand for various products, economists can identify the optimal price points that maximize profitability and market efficiency. This module explores some of the foundations of price elasticity and its applications, to provide the requisite infrastructure for further study in subsequent modules, as we aim to navigate the complex landscape of pricing in today's dynamic markets.

What's included

8 videos5 readings4 assignments1 discussion prompt

Module 2 delves into the complex relationship among governments, platforms, businesses, and consumers, shedding light on the profound impacts of policy interventions on various stakeholders. In an increasingly interconnected world, government policies and platform regulations wield immense influence over market dynamics. This module explores how these interventions can lead to clear winners and losers among businesses, consumers, and society at large. Moreover, it delves into the strategies and tactics employed by firms to actively influence and shape market policies to their advantage. By examining actual policy scenarios, learners will gain an understanding of the multifaceted interactions within modern markets, the pivotal role played by government and platforms in shaping their outcomes, and the high potential for unintended consequences from market intervention.

What's included

7 videos4 readings4 assignments

Module 3 begins to cover a crucial component of strategy – pricing – by directly solving a profit maximization problem. Market power enables firms to set prices and influence consumer choices to a substantial degree. This module delves into the complexities of optimal pricing in a number of scenarios, providing a foundation for concepts such as price discrimination, monopolistic competition, and strategic pricing. Learners will gain insights into the potential trade-offs between profit maximization and consumer welfare, as well as the economic and ethical implications of firms wielding substantial pricing authority. By examining actual scenarios, this module equips students with the analytical tools and knowledge needed to begin to navigate the challenging terrain of pricing strategies.

What's included

7 videos4 readings4 assignments

Module 4 continues the coverage of optimal pricing with market power by providing a second, dynamic and iterative approach that firms employ in determining product pricing – by tying together the concepts of elasticity and profitability. As a result, the module offers profound insights into the dynamic world of pricing strategies. In today's complex and diverse markets, businesses must tailor their approaches to meet the varying needs and preferences of different consumer groups. This module explores the fundamental concept of market segmentation, by which firms identify and categorize distinct customer segments based on factors such as demographics and behaviors as a means of price customization, where pricing strategies are adapted to align with the unique characteristics and willingness-to-pay of each segment. This module equips learners with the knowledge and skills to craft effective pricing strategies that maximize profitability, integrating all of the previously covered concepts in the course into a single, simple rule that is employed by sophisticated firms to price optimally and dynamically: The Optimal Markup Rule.

What's included

5 videos4 readings4 assignments

Module 5 serves as a capstone in the economics sequence – ending where the sequence began – providing students with a compelling framework for understanding strategic decision-making, including pricing, in a wide range of contexts. Non-cooperative game theory, which analyzes the strategic interactions and choices of economic agents such as individuals and firms within competitive settings, is essential for fostering an understanding of how economic agents make decisions that impact outcomes. This module introduces students to the key concepts and principles of game theory, such as Nash equilibrium, dominant strategies, and information asymmetries, while exploring its applications in economics, business, and policy. Students will develop the analytical skills needed to assess and predict outcomes in simple strategic interactions, connecting together all of the concepts from the economics sequence into a single framework.

What's included

7 videos4 readings4 assignments

This module contains the summative course assessment that has been designed to evaluate your understanding of the course material and assess your ability to apply the knowledge you have acquired throughout the course.

What's included

1 assignment

Instructors

Liad Wagman
Illinois Tech
2 Courses2,267 learners
Priyanka Sharma
Illinois Tech
2 Courses2,267 learners

Offered by

Illinois Tech

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Get a head start on your degree

This course is part of the following degree programs offered by Illinois Tech. If you are admitted and enroll, your coursework can count toward your degree learning and your progress can transfer with you.

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