Real world decision-making is characterized by an interplay between individual incentives and constraints. Firms might aim to do what is best for themselves, but are constrained by their available production technology, existing rules and by the behavior of their competitors. Sensible decisions about pricing, market entry and investment cannot be made without an assesment of how customers and competitors will react. This course introduces students to the basic microeconomic tools needed to systematically analyze economic decisionmaking. Focus is on the consequences of alternative types of competition, strategic interaction between agents with conflicting interests, alternative ways to price products, and contractual relationships between firms, with particular emphasis on mergers.
- Competition and efficiency
- Monopoly pricing and price discrimination
- Game theory
- Vertical relations and contracts
- Auction theory
Learning outcome knowledge
The aim of this course is to provide a comprehensive understanding of (i) the economics of monopoly, oligopoly, and competition, (ii) pricing and auctions, and (iii) vertical relations between firms. More generally, students learn how microeconomic theory can facilitate private and public decision making so as to achieve market outcomes that benefit firms and society.
- Written exam: 100%