ECON2033 Microeconomics of Strategy
This module develops the basic models of non-competitive behaviour in modern microeconomics. It builds a framework for the analysis in markets where traditional price theory fails. Central elements in the development of this framework are choice in strategic situations and choice under asymmetric information. Building models from first principles, students will see why the good welfare properties of the competitive market system fail in the presence of either informational asymmetries or strategic motives. The theories are applied to the analysis of public goods, externalities, oligopolistic markets, markets for insurance, the theory of auctions and other applications. This module applies the analysis of market failure in a variety of policy contexts.
Aims and Objectives
To equip the students with the basic tools of non-competitive microeconomic analysis and develop models that help us to understand central problems of policy analysis. This module, together with the material on competitive markets in ECON2003, aims to provide the student with a thorough understanding of the pursuit of individual objectives in different institutional frameworks and its implications as well as limitations for government policy
Having successfully completed this module you will be able to:
- analyse the economic efficiency of alternative social institutions and their relation to a variety of market failures
- identify institutional factors in actual markets and organisations that may be detrimental for welfare
- assess the efficiency of various economic policies aimed at correcting these inefficiencies
• Normal form games, dominance and Nash equilibrium; applications to public goods, externalities, oligopoly. • Extensive form games and applications to moral hazard, bargaining, cooperation • Incomplete information and application to auctions, lemon markets and signalling, voting. The scope of related government policies.
Learning and Teaching
Teaching and learning methods
There will be two lecture periods per week, plus a series of masterclasses. There will be assessed coursework on a weekly basis. Working in groups will be encouraged for non-assessed coursework.
|Total study time||150|
|Exam (40 minutes)||15%|
|Exam (120 minutes)||75%|
|Exam (2 hours)||100%|
Repeat type: Internal & External