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Game Theory and Experimental Economics

Prof. Dr. Karl Morasch (Universität der Bundeswehr München)


Game Theory analyzes individual decision making in strategic situations. Unlike to a decision theoretic setting the outcome for an individual is then affected by actions of other players as well. Making sensible decisions therefore requires predicting the likely behavior of one’s opponents. Assumptions about the rationality of the players and their knowledge of each other’s preferences and available strategies are therefore central for the proper analysis of a game.

Most game theoretic results are quite sensitive with respect to small changes in the exact rules of the game (e.g. timing of moves, symmetry vs. asymmetry of information). Testing predictions derived from game theoretic models with field data is usually unfeasible as it is not possible to control for all these variations. Experimental Economics can achieve the necessary level of control by testing theories in the lab where the rules of a game can be exactly replicated. Departures from the theoretically predicted results must then stem from inappropriate assumptions about the preferences or the rationality of the players.

We seek both papers that apply game theoretic modeling to any kind of management problem as well as experimental studies that test game theoretic results that are relevant for business, management and economics.


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