ECO400 Decisions, Strategy and Information

• Topics

  The course introduces students to analysis of decision making under uncertainty and under strategic interaction. Students will become familiar with analytical tools that are used in advanced courses in financial economics and in other specializations such as industrial economics and economics of organizations. The first part of the course focuses on decision making under uncertainty and agents' risk aversion. Thereafter students are introduced to game theory and information economics.

• Learning outcome

  Knowledge

  Upon completion of the course, students will:

  • be able to describe and explain theories and principles for analysis of decision making under uncertainty and under strategic interaction
  • be able to discuss the limitations and criticism of the theories taught in this course.

  Skills

  Upon completion of the course, students will be able to:

  • apply economic analysis to understand decision making under uncertainty and strategic interaction
  • apply game theoretic methods to understand behavior and outcomes in situations where agents have different objectives, action possibilities and information.

  General competence

  Upon completion of the course, students will:

  • be able to apply these methods to relevant economic problems.

• Teaching

  The course features interactive sessions and lectures with classroom participation at least once per week. Online videos and exercises covers most of the curriculum, while the on-campus sessions will feature Q&A, discussions, experiments and exercises.

• Recommended prerequisites

  The course applies analytic models to study decision making, strategic interaction and use of information, and is thus best suited for students who are comfortable with this kind of approach. The models that are used are relatively simple, and no special prerequisites are required, though we will make use of basic calculus.

• Compulsory Activity

  Two individual assignments. The assignments have to be taken in the same semester the exam is written.

• Assessment

  Individual 4 hours digital school exam. The exam must be written in English.

• Grading Scale

  A - F

• Computer tools

  None.

• Literature

  Mas-Colell, Whinston og Green: Microeconomic theory, Oxford University Press 1995, ch. 6.

  Hirschleifer and Riley: The analytics of uncertainty and information, Cambridge University Press 1992, ch 5.1-5.2.2.

  R. Gibbons: A primer in game theory, Harvester Wheatsheaf, 1992.

  Bolton, P. and M. Dewatripont (2005): Contract theory, MIT press. Chs 1.1-1.3, 2.1-2.2, 4.1,4.4 

• Permitted Support Material

  All written support material permitted (category III) 

  Calculator 

  One bilingual dictionary (category I) 

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/ and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/