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Microeconomics II: Market Imperfections and Strategic Interaction, Group B-C2

Market economics are inspired by the idea of decentralized decision making: Each individual pursues independently its own goals, but an "invisible hand" in the market interaction ensures an overall desirable outcome. Students will learn, how this "invisible hand" works in competitive markets and why and in which respect the outcome is socially optimal. While perfect competition is useful as a rigorous foundation for why often it is the case that transactions are best organized via markets, in reality there are many deviations from this benchmark case. We discuss the most important ones, namely (1) market power (using the core instrument of (micro-) economics, namely game theory, (3) externalities and public goods, and (3) asymmetric information,
Course code
ECON202
Course type
BSc Course
Weekly Hours
2,0
ECTS
3.0
Term
FS 2019
Language
Englisch
Lecturers
Dr. Tim Thomes
Please note that exchange students obtain a higher number of credits in the BSc-program at WHU than listed here. For further information please contact directly the International Relations Office.
1. Interactions in many markets: General equilibrium
2. Welfare economics: The two fundamental theorems of welfare economics
3. Market power: Oligopoly (Cournot, Bertrand)
4. The toolbox for analyzing strategic interaction: Game theory (concepts, Nash equilibrium, dominant strategies, mixed strategies, strategic complements and substitutes)
5. Asymmetric information (Adverse selection, moral hazard)
6. Externalities and public goods
Date Time
Monday, 21.01.2019 11:30 - 15:15
Monday, 28.01.2019 11:30 - 15:15
Monday, 11.02.2019 11:30 - 15:15
Standard micro theory and game theory
Robert S. Pindyck, Daniel L. Rubinfeld, Microeconomics, 6th Edition, Pearson-Prentice Hall (2005) Secondary literature: Will be announced during the course
Final Exam (100%)
Microeconomics I, Mathematics I
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