Game theory is an important way to think about how different people with different motivations (incentives) will behave in response to how you will behave.
Describe the difference between “normal form games” and “extensive form games” in economics. (200 words)
Give an example from a practical situation in a business environment in which game theory can be applied. How applicable is game theory to project finance? (200 words)
Describe “revealed preferences theory” and why it is useful for decision-making in game theory. (200 words)
The response includes evidence of deeper thinking, extending the answer beyond the set questions by linking it with other (relevant) topics covered in class and the overall learning experience in this course. This may include additional examples and commentary on the overall usefulness of game theory in project finance, including alternative suggestions to address any disadvantages or weaknesses associated with applying game theory in project finance.
Another area of extension could be a quick comparison between game and decision theories.
