AEM 7020 - Applied Microeconomics II: Game Theory

Spring. 3 credits. Letter grades only (no audit).

Enrollment limited to: first- or second-year PhD students in Applied Economics and Management or related field.

M. Waldman.

This course teaches the fundamentals of non-cooperative game theory and classic applications used in applied work in economics and related fields such as finance, marketing, operations, and accounting. The course begins with a brief primer on non-cooperative game theory that covers pure versus mixed strategies, Nash equilibrium, and various equilibrium refinements. Coverage then turns to basic frameworks that utilize game theory to model a wide range of settings in economics and related fields. These include agency analysis, classic asymmetric information models such as adverse selection and signaling, time inconsistency, and repeated games and reputation.

Outcome 1: Students will be able to read and interpret applied game theory models that appear in the economics literature.

Outcome 2: Students will be able to construct and solve game theory models that frequently appear in applied theory papers and empirical papers.

Outcome 3: Students will be able to explain basic economic concepts such as signaling, adverse selection, time inconsistency, competitive equilibrium, etc.

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