The aim of the course is to provide students with the basic toold of game theory, which will then be applied to the study of firms' behaviour in a strategic context.
Course aims to: Provide Fundamental concepts of Economics, Monopoly & Oligopoly Models, Basic Consumer Theory as well as Game Theory applied to these fields
AIMS AND LEARNING OUTCOMES
Students will learn the mathematical tools used to understand and critically evaluate the strategic interaction between individuals, firms, and States.
In the second module, these tools will be applied to the study of industrial economics and, in general, to the analysis of strategic interaction between firms. In this way, students will learn to critically evaluate some features of competition policy.
The course is organized in two modules.
In the first module, we will cover some basic concepts of non-cooperative game theory:
Some elementary taxonomy concerning games.
Dominant and dominated strategies, Nash equilibrium.
Limits and refinements of Nash equilibria.
Games and rationality.
All these issues will be studied by making real-world examples and combining theory with exercises and applications.
Building on the game theory tools developed in the first module, in the second module the following topics will be covered:
Basic consumer theory;
Determinants of market structure;
Cartels & collusion;
Recommended readings for this first module are:
Dixit, A. and B. Nalebuff (2010): The Art of Strategy. W.W. Norton & Co Inc, M.
Osborne, M. and A. Rubinstein (1994): A Course on Game Theory, The MIT Press.
There is not a single book suggested for this module. However, most of the material is based on:
Pepall, Richards, Norman, Industrial Organization: Contemporary Theory and Empirical Applications. fifth edition, Blackwell Publishing, 2013.
Belleflamme P. and Peitz M. (2015), Industrial Organization. Markets and Strategies, Cambridge University Press.
Written examination with questions on theory and quantitative exercises.
The exam is aimed to verify students' ability to apply the basic concept of game theory and industrial economics to real world situations.