Course content
This course establishes a foundational understanding of game theory and information economics, providing the theoretical tools essential for advanced studies in microeconomics, business economics, and financial economics.
The course consists of two parts:
The first part focuses on the core concepts of game theory. Topics include static games, dynamic games (such as repeated games), and Bayesian games, along with some advanced concepts and refinements. The aim is to understand strategic decision-making, where outcomes depend on the choices of multiple interacting individuals or entities.
The second part introduces the basic ideas of contract theory. We analyze contracts where one party has hidden information (adverse selection) or can take hidden actions (moral hazard). In addition, we will cover key aspects of more general mechanism design and discuss incomplete contracts. The aim of this part is to get a good understanding of the basic trade-offs involved, e.g. motivation versus risk sharing, and the basic mechanisms (such as information collection, menu of contracts, signalling etc). The aim is also to train the students to actually make optimal contracts and related mechanisms in simple settings by formulation and solving the associated mathematical programmes.
See course description in course catalogue