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Markets and Games
Last Updated: 2026-06-03 00:14:32
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. Learning Objectives: [LO1] Be able to analyze and interpret strategic interactions (within and also beyond the context of markets) [LO2] Analyze market interactions to derive and explain policy-relevant insights and implications
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; however, it is not necessary to purchase any of the texts. • Cabral, L.M., 2017. Introduction to industrial organization. MIT press. • 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.
Resources
Lecture Notes
The lecture will be based on lecture slides, which will be made available on Moodle.
Literature
The course content will be drawn from a variety of sources. Some relevant texts are below; however, it is not necessary to purchase any of the texts. • Cabral, L.M., 2017. Introduction to industrial organization. MIT press. • 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.
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.
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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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