GRA 6626 Decisions, Strategy and Information
The course will provide students with advanced methods and theories in contemporary microeconomics for understanding economic decision-making and strategic interactions. Special emphasis will be placed on connecting theory to real-world applications, with the help of digital tools. Examples of such applications include environmental sustainability policies, insurance markets and risk, public good provision, and contracts.
The course will be divided into two parts: In the first, students will acquire an advanced understanding of models of decision theory and competitive market equilibrium. In the second, they will be introduced to game theory with the goal of analyzing situations in which individuals interact in strategic ways and under limited information.
The course will enable students to:
- Predict optimal decisions under uncertainty and over time.
- Understand the basic workings of insurance markets.
- Understand the microeconomic foundations of general equilibrium and macroeconomic outcomes.
- Identify market failures related to external effects and public goods.
- Design optimal environmental policies in a sustainable economy.
- Make sensible predictions about the behavior of economic agents and outcomes in situations with strategic interaction and limited information.
- Design optimal contracts between a principal and an agent.
- Develop their digital skills in Excel and Matlab.
- The students will develop a way of thinking about strategic interactions in real life and particularly in business situations.
- Students will learn to use a game-theoretic analytical framework to study aspects of cooperation, negotiation, and conflict.
- Students will acquire tools to examine the debates surrounding market efficiency and inequality and the sustainability of climate change treaties.
Following are the main topics covered in the course:
- Decision Theory
- General Equilibrium and Welfare
- Market Failure: Externalities
- Game Theory and its Applications
- Economics of Information
A wide range of complementary learning tools will be used during the course. Excel spreadsheets will be provided in order to facilitate model simulations, so that issues can be addressed interactively. Furthermore, students will take part in experiments that will allow them to actively make choices in virtual market contexts. Finally, the course will include a joint lecture with the Advanced Macroeconomics (GRA6634) course, during which students will analyze consumption theory problems from both a micro and macro perspective, including simulation exercises using Matlab.
Please note that while attendance is not compulsory, the student will be responsible for any material provided in class.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
|Exam category||Weight||Invigilation||Duration||Support materials||Grouping||Comment exam|
Form of assessment:
Internal and external examiner
Examination when next scheduled course
|100||Yes||3 Hour(s)||Individual||Final written examination under supervision|
|Form of assessment:||Written submission|
|Support materials:|| |
|Comment:||Final written examination under supervision|
|Resit:||Examination when next scheduled course|
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.