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40106-01 - Lecture: Game Theory and Theory of the Firm (6 CP)
| Semester | spring semester 2016 |
| Course frequency | Every spring sem. |
| Lecturers |
Dragan Ilic (dragan.ilic@unibas.ch, Assessor)
Frédéric-Guillaume Schneider (fr.schneider@unibas.ch) |
| Content | Content part: Game Theory: The courses will be divided into lecture hours and exercise hours. Exercise sets will be available after every lecture hour and will be partly solved together in class. At the end of the course, we will conduct a quick review of the material. Block 1: Static games of complete information: • Introduction, normal form, best response, dominant strategies, iterated elimination, Nash equilibrium • Mixed Strategies • Proof of Existence, multiple equilibria, refinements Block 2: Dynamic games of complete information: • Extensive form, backwards induction • Subgame perfection, repeated games • Infinitely repeated games, bilateral bargaining Block 3: Static games of incomplete information: • Bayesian games, Bayesian Nash Equilibrium • First-price auction, double auction Block 4: Dynamic games of complete and incomplete information: • Purification of mixed strategies, Perfect Bayesian Equilibrium • Signaling games Content Part: Theory of the Firm: Markets and Prices as Coordination and Incentive Devices • Transaction Costs • Team Production • Asymmetric Information • Principal-Agent Theory • Signaling • Efficiency Wages |
| Learning objectives | Learning Goals: Game Theory: As Gibbons (1992, xi) puts it: “Game Theory is the study of multiperson decision problems. Such problems arise frequently in economics. As is widely appreciated, for example, oligopolies present multiperson problems – each firm must consider what the others will do. But many other applications of game theory arise in fields of economics other than industrial organization. At the micro level, models of trading processes (such as bargaining and auction models) involve game theory. At the intermediate level of aggregation, labor and financial economics include game-theoretic models of the behavior of a firm in its input markets (rather than its output market, as in an oligopoly). There are also multiperson problems within a firm: many workers may vie for one promotion; several divisions may compete for the corporation’s investment capital. Finally, at a high level of aggregation, international economics includes models in which countries compete (or collude) in choosing tariffs and other trade policies, and macroeconomics includes models in which monetary authority and wage or price setters interact strategically to determine the effects of monetary policy.” This course will introduce students to the main concepts and techniques of game-theoretic analysis. At its core lies the understanding of strategic interactions between deciding agents. The students will appreciate how to apply game-theoretic analysis to strategic settings. Theory of the Firm: Why do firms exist? Why are firms organized the way they are? Traditional economic models leave little room for firms or other organizations as they focus on market exchange between individuals. This course will introduce students to microeconomic models that try to explain the existence and structure of firms as we observe them in the real world. Economics brings a rigorous approach that is grounded in theory. The course will provide a basic understanding of economic approaches to modeling and understanding aspects of firms, their structure, the behavior they create, and how they differ from market interaction. About half of the course will be based on the standard textbook by Milgrom and Roberts, the other half will consist of influential articles on the economics of organizations, by authors such as Coase, Williamson, Hart, and Tirole. |
| Bibliography | Literatur Part:Game Theory: The teaching program follows Robert Gibbon’s book “Game Theory for Applied Economists”, also known as “A Primer in Game Theory,” (Princeton University Press, 1992). Literatur Part: Theory of the Firm: The readings will consist of both scholarly research articles and chapters from the textbook, Economics, Organization and Management, by Paul Milgrom and John Roberts (1992, Prentice Hall). Both kinds of readings will be made available online. Weitere Literaturangaben erfolgen während der Veranstaltungen. |
| Weblink | Weblink zu ADAM |
| Admission requirements | Completed Bachelor in Business and Economics |
| Course application | Registration: Please enrol in MOnA. EUCOR-Students and Exchange-Students have to enrol at the students administration office (studsek@unibas.ch) within the official enrolment period. Enrolment = Registration for the exam! |
| Language of instruction | English |
| Use of digital media | No specific media used |
| Interval | Weekday | Time | Room |
|---|
No dates available. Please contact the lecturer.
| Modules |
Kernmodul BWL (Master Business and Economics) (Pflicht) Modul Kernbereich Wirtschaftswissenschaften für Fortgeschrittene (Master Sustainable Development) Modul Methoden der Wirtschaftswissenschaften (Master European Global Studies) Modul Wirtschaftswissenschaftliche Grundlagen der Europäischen Integration (Master European Studies (Start of studies before 01.02.2015)) |
| Assessment format | end-of-semester examination |
| Assessment details | written exam: 15.06.2016; 12:15-13:45. Aula: A-MA; Pathologie oben: ME-SAN; Bernoullianum: SAV-Z. rooms: http://wwz.unibas.ch/studium/pruefungen/raeume/. Bitte kontrollieren Sie die Raumzuteilung kurz vor den Prüfungen noch einmal! Part: Game Theory: The course grade of this part will be based on an exam which will cover all of the material covered in the course. Part Theory of the Firm: The course grade of the part "Theory of the Firm" will be based on an exam (80%) and regular in-class testing (20%). Presence at the classes is mandatory to receive the in-class credits. The exam will cover all of the material covered in the course, both from lecture slides and readings. You will receive more precise information regarding the requirements and grading during the first class. You can still withdraw from the examination by submitting a completed, signed form to our office from 22.03.16 until 01.04.16 / 12:00 o’clock. Withdrawals sent by email will not be accepted. You will find the examination withdrawal form on the Homepage of the Student Dean’s Office. Prior to 21.03.16, please only use MONA for withdrawing. The exam rooms will be published up to 27.05.16. |
| Assessment registration/deregistration | Registration: course registration |
| Repeat examination | no repeat examination |
| Scale | 1-6 0,1 |
| Repeated registration | as often as necessary |
| Responsible faculty | Faculty of Business and Economics , studiendekanat-wwz@unibas.ch |
| Offered by | Faculty of Business and Economics |