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363-0515-00L 3 Credits MSC , NDS D-MATH , D-MTEC
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Markets and Games

Lecturers & Examiners: Prof. Dr. Barton Lee
VVZ CR 4.4

Last Updated: 2026-06-01 11:33:45

Abstract

The course provides an introduction to the foundations of microeconomics: markets and game theory. Gametheory is a set of theoretical tools for analyzing strategic behavior. We will develop and apply these tools toindustrial organization, markets, and firm behavior. We’ll discuss concrete and real-world examples of theirapplications, including market regulation and competition law.

Objective

The purpose of this course is to provide master’s 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 analyze strategic interactions using formal tools from game theory. - Students will be able to understand and use existing models to make predictions of firm and market behavior. - Students will be able to use existing models to understand the benefits and costs of certain market regulations and competition laws.

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, policy decisions and government regulation, and research. This course focuses on Markets and Games. Game theory is a set of theoretical tools to analyze strategic behavior. We will develop and apply these tools to industrial organization, markets, and firm behavior. The course content will be predominately theoretical, and it will make use of mathematical notation and techniques. However, throughout the course, relevant applications to markets (e.g., firm behavior, market structure, competition law, and anti-trust regulation) will be analyzed and discussed. A broad outline of the course content that we will aim to cover is described below. 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). Markets: - Monopoly Firm Behavior - Foundational Models of (perfect and imperfect) Market Competition - Collusion, Mergers and Acquisitions - Competition Law and Anti-trust Regulation - Market Competition with Innovation and Research & Development (R&D) - Market Competition with Informative and Uninformative Advertising References. The course content will be drawn from a variety of sources. Some relevant texts are below: - Cabral, L.M., 2017. Introduction to industrial organization. MIT press. - Ellingsen, T., 2023. Institutional and organizational economics: a behavioral game theory introduction. John Wiley & Sons. - Espinola-Arredondo, A. and Muñoz-Garcia, F., 2023. Game Theory: An Introduction with Step-by-step Examples. Springer Nature. - Gibbons, R., 1992. Game theory for applied economists. Princeton University Press. - Pepall, L., Richards, D. and Norman, G., 2014. Industrial organization: Contemporary theory and empirical applications. John Wiley & Sons. - Tirole J., 1988, The theory of industrial organization. MIT Press.

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 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.
  • Wed 14:15-16:00 (HG E 1.2)
2 h weekly

Offered In