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Economics, Politics, and Markets
Last Updated: 2026-06-01 11:30:50
Abstract
Understanding a society’s economic, social, and market outcomes requires one to understand its politics. Yet, a common view is that politics is unpredictable and unintelligible–in this course, we push against this view. We will use game-theoretic tools from economics to analyze politics in a structured and principled way and to develop new insights into policy making and regulatory decisions.
Objective
The objective of this course is to introduce students to the formal analysis of politics, via economic models. After completing this course: - Students will be able to analyze economic models of politics and interpret the results. - Students will be able to evaluate economic models of politics - Students will be able to interpret real-world political phenomena in terms of economic models - Students will be able to develop and create new insights for politics using economic models
Content
This course will introduce students to a variety of foundational economic models of politics and policy making. This includes–but is not limited to–models of electoral competition, political agency, legislative bargaining, and the interaction between political and market outcomes (e.g., via market and business regulations). The course material will mainly be theoretical and mathematical (primarily using game theory). Real-world examples and empirical research will be discussed to help motivate and evaluate the theoretical material. Most of the content will focus on the United States, for which rich theoretical and empirical literatures exist. However, the key tools, ideas, and insights can be applied more generally and beyond the United States. The course assumes basic mathematical competencies (e.g., familiarity with algebra, calculus, and probability). We will not assume prior knowledge of game theory–the course will introduce game theoretic concept as they are required. However, having previously taken an introductory course in game theory will be an advantage (e.g., D-MTEC courses such as: 363-0558-00L “Introduction to Game Theory: Strategic and Cooperative Thinking” or the recent edition of 363-0515-00L “Markets and Games” or "Decisions, Markets, and Games").
Resources
Literature
The course material primarily draws from the following textbook: - Gehlbach, S., 2021. Formal models of domestic politics. Cambridge University Press. Other useful resources: - Ashworth, S., Berry, C.R. and de Mesquita, E.B., 2021. Theory and Credibility: Integrating Theoretical and Empirical Social Science. Princeton University Press. - Espinola-Arredondo, A. and Muñoz-Garcia, F., 2023. Game Theory: An Introduction with Step-by-step Examples. Springer Nature. - McCarty, N. and Meirowitz, A., 2007. Political game theory: an introduction. Cambridge University Press. - Gibbons, R.S., 1992. Game theory for applied economists. Princeton University Press.
General Information
- Language
- English
- Levels
- MSC
- Frequency
- Yearly recurring
Examination
- Type
- graded semester performance
Course Components
| Type | Title | Time & Place | Hours |
|---|---|---|---|
| lecture with exercise | Economics, Politics, and Markets |
|
2 h weekly |
Offered In
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Management, Technologie und Ökonomie Master (Willkommen und Einführung ins MSc ETH MTEC 15. September 2025, 14.00 - 16.15, Raum HG E 1.1)
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