Microeconomics of Strategy | ECON2033 | University of Southampton

Module overview

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

Learning Outcomes

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

Syllabus

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.

Study time
Type	Hours
Independent Study	150
Total study time	150

Assessment

Summative

This is how we’ll formally assess what you have learned in this module.

Breakdown
Method	Percentage contribution
Mid-term test	20%
Problem sets	10%
Final Assessment	70%

Referral

This is how we’ll assess you if you don’t meet the criteria to pass this module.

Breakdown
Method	Percentage contribution
Final Assessment	100%

Repeat

An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.

Breakdown
Method	Percentage contribution
Final Assessment	100%

Repeat Information

Repeat type: Internal & External