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Decisions, Markets, and Games
Last Updated: 2026-02-05 16:39:12
Abstract
This course provides an introduction to microeconomics. The course emphasizes the conceptual foundations of microeconomics: decisions, markets, and games. The course contains concrete examples of their application.
Objective
The purpose of this course is to provide master students with an introduction to graduate-level microeconomics, particularly for students considering further graduate work in economics, business administration, management science, public policy, or political science. The course provides the fundamental concepts and tools for graduate courses in economics offered at ETH and UZH. After completing this course: - Students will be able to understand and use existing models to make predictions of consumer, firm, and market behavior. - Students will be able to understand and analyze strategic interactions using tools from game theory.
Content
Microeconomics is the branch of economics which studies the decision-making and strategic behavior by individuals, households, firms, industry, and government. The economic equilibrium is the result of agents' (strategic) interactions and, ultimately, this equilibrium determines the allocation of scarce resources. Microeconomics is an element of nearly every subfield in economic analysis today. This course introduces the fundamental frameworks which form the basis of many economic models, economic analyses, and research. The course is divided into two halves. The first half of the course focuses on the analysis of decisions and markets. The second half of the course focuses on the topic of game theory. The course content will be predominately theoretical, and it will make use of mathematical notation and techniques. However, throughout the course, relevant applications to individuals, business, and politics will also be presented to help illustrate and motivate key theoretical concepts. A broad outline of the content in each half of the course is described below. Decisions and markets: - Theory of the consumer and producer (e.g., consumer preferences, budget sets, and optimal choice; demand functions; profit maximization). - Market structure and general equilibrium (e.g., perfectly competitive markets; market equilibrium in an exchange economy). Game theory: - Normal-form games (e.g., dominated strategies and admissibility; Nash equilibrium in pure strategies; Nash equilibrium in mixed strategies). - Extensive-form games (e.g., backward induction and Subgame Perfect Nash Equilibrium).
Resources
Lecture Notes
The lecture will be based on lecture slides, which will be made available on Moodle.
Literature
The first half of the course (“Decisions and markets”) is mostly based on the textbook by R. Serrano and A. Feldman: "A Short Course in Intermediate Microeconomics with Calculus" (Cambridge University Press, 2013). Another textbook of interest is "Intermediate Microeconomics: A Modern Approach" by H. Varian (Norton, 2014). Exercises are available in the textbook by R. Serrano and A. Feldman ("A Short Course in Intermediate Microeconomics with Calculus", Cambridge University Press, 2013). More exercises can be found in the book "Workouts in Intermediate Microeconomics" by T. Bergstrom and H. Varian (Norton, 2010). The second half of the course (“Games”) is mostly based on the textbook by R. Gibbons “Game Theory for Applied Economists” (Princeton University Press, 1992).
General Information
- Language
- English
- Levels
- MSC , NDS
- Frequency
- Yearly recurring
Examination
- Type
- end-of-semester examination
- Mode
- written 90 minutes
- Aids
- None
Course Components
| Type | Title | Time & Place | Hours |
|---|---|---|---|
| lecture |
Decisions, Markets, and Games
Students, who have already successfully completed the courses “363-0515-00 Decisions and Markets” and / or “363-0558-00 Introduction to Game Theory: Strategic and Cooperative Thinking” can’t register again.
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2 h weekly |
Offered In
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Application Area (Only necessary and eligible for the Master degree in Applied Mathematics. One of the application areas specified must be selected for the category Application Area for the Master degree in Applied Mathematics. At least 8 credits are required in the chosen application area. Credits from other application areas cannot be recognised for further application areas.)
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