Multidisciplinary Microeconomics & Game Theory

Course goals

Learning objectives
The objective of this course is to deepen students' understanding of the relevant concepts of game theory, and to link those concepts to the analysis of research questions in microeconomics, and in other disciplines.
 
By the end of the course, the student is able to:

• apply the relevant tools to analyse strategic behaviour;
• understand the mechanisms at work in games with incomplete and with imperfect information;
• understand how game theory can be applied to design incentive schemes;
• understand the relevance of game theory for insight into the formation of social and economic networks;
• understand why auctions are useful mechanisms to elicit a person’s true preferences;
• understand how evolutionary and learning process can replicate rational decision making

Content

Students who are not enrolled in the research master Multidisciplinary Economics should contact the course coordinator for enrollment in this course.

Whereas decision theory studies the decisions of individuals in isolation, game theory studies interactive decision making. This course shows the relevance of game theory for microeconomics, but also for some other disciplines. As a starting point, we develop the tools and insights to analyse strategic interactions in any static or dynamic game, with complete or incomplete information. These tools and insights are next used in several applications. How can job applicants prove their quality to uninformed employers (signalling theory)? How can employers design employment contracts that appropriately reward their employees, and that ensure that employees do a good job (principal-agent theory)? How are auctions best designed (auction theory)? How do individuals decide to connect to social networks (network formation)? How can game theory be applied to evolutionary processes and to learning (evolutionary game theory)? 
 
Intended Learning Outcomes
The graduate:

• has broad knowledge of core and state-of-the-art theories and empirical methods in economics
• can think in a logical way
• has knowledge of multidisciplinary aspects of their own research specialization

Format
The course consists of biweekly meetings focusing on the understanding of the formal models and on problem-solving skills. In all weeks, we expect students to read the relevant material and prepare the weekly assignments ahead of the classes.

In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN. Separate or spare codes are usually not available.