Mathematical Economics

The module is an introduction to formal economic modeling and the required mathematical methods and tools. In the first part of the module is concerned with models of economic behavior and market interaction. Topics include: Decision Theory, Game Theory, Social Choice and Market Design. The second part of the module focuses on optimal decision-making in a dynamic setting. Topics include: Life-cycle consumption savings tradeoff and optimal economic growth with disaster risk.

Objectives:

The course should enable students to use mathematics to model economic behavior, strategic interaction and markets, in static and dynamic settings. Furthermore, it should allow students to address standard questions concerning optimal decision making in a market environment and of the optimal design of economic institutions (with a focus on markets) and regulatory policies. Students will address these questions using formal economic models, numerical optimization techniques and mathematical equilibrium solution concepts. Furthermore, students will learn to critically assess the drawbacks of the used models and modeling techniques and to acknowledge and discuss general problems arising when modeling economic behavior.