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Content: Many of the economic decisions we make every day, are taken under uncertainty what the outcome of our decisions will be. In some environments we may use various types of insurances to handle risk, in other environments we face uncertainty due to the potential for strategic interdependence. The utility or payoff an agent receives depends not only on the agents own actions but also on the actions of other agents. One purpose of the course is to give knowledge about how one may use economic theory and game theory to understand human behavior in such situations. The course includes analysis of moral hazard and adverse selection, behavior in duopoly, actions under monopoly and behavior in various types of auctions. Some of the issues will be analyzed in terms of laboratory experiments. A second purpose of the course is to extend the students' knowledge in consumer theory and production theory. |
