Strategy and Markets / Strategi og markeder

Studyboard of Market and Management Anthropology, Economics, Mathematics-Economics, and Environmenta, Odense
Teaching activity id: 8102401.
Teaching language: English.ECTS / weighting: 10 ECTS / 0.167 full-time equivalent.
Examination language: English.
Exam activity id: 8102412, 8102402.Approved: 03-10-17.
Period: Spring 2018.
Grading: External examiner.
Assessment: 7-point scale.
Offered in: Odense.

Subject director:
Rafael Treibich, Department of Business and Economics.

Prerequisites:
The course requires knowledge of basic microeconomic principles. This includes in particular the concept  of supply and demand, consumer and producer theory, as well as monopolistic competition. These prerequisites are taught in the first year’s microeconomics class.


Purpose:
The subject is based on the knowledge and analytical insights acquired in the course microeconomics, whose subject can be seen as the foundation for Strategy and Markets. While most of the content in the course microeconomics deals with optimal economic decisions (a consumer choosing how to spend her budget, a firm deciding how much to sell, etc…), the course Strategy and Markets deals with strategic interactions: situations where an agent’s choices do not only affect his own welfare but also the welfare of the others. These strategic interactions, that we model as ”games”, are pervasive in our modern society, in the economic, political and even entertainment world. Think about a soccer player deciding whether to shoot his penalty kick on the left or on the right, a politician deciding whether to increase his advertisement expenses or a a firm (in a duopoly) choosing whether to increase its prices. In all these instances, the outcome depends both on the agent’s choice (kicker, politician, firm) but also on the ”opponent” ’s choice (goalkeeper, opposing candidate, competing firm). The purpose of the course is to understand how to analyze such strategic interactions and find the most likely outcome. The topic creates a solid micro-theoretical foundation for many other subjects in economics.

Content - Key areas:
• Definition and description of a game.
• Games with simultaneous moves.
• Games with sequential moves.
• Extensive game play (game tree) and their solution.
• Introduction to games with  uncertainty.
• Games with private / asymmetric information between players.
• Moral Hazard, Adverse Selection and Signaling in Game Theory.
Other topics in game theory.

Goals description (SOLO taxonomy):
Understand the difference between a decision problem and a game.
Be able to identify the distinctive features of a game, so as to apply the right solution concept.
• Be able to analyze the effects of  basic concepts such as moral hazard, adverse selection, signaling as well as identify concrete economic structures that are affected by moral hazard and adverse selection.
• Be able to assess and judge the importance of uncertainty and imperfect information in theory and practice in relation to the perfect information benchmark.
• Be able to apply key information and game theory aspects to real economic problems. 

Literature:
Examples
Dixit, S. Skeath, and D. Reiley: “Games of Strategy”. –Norton.

Time of classes:
Spring.

Scheduled classes:
Lectures: 4 hours per week for 15 weeks.
Tutorials: 2 hours per week for 14 weeks (starting week after semester start).

Form of instruction:
The student's total teaching load is expected to be used as follows:
Lectures - 60 hours
Practice lessons - 28 hours
Preparation for lectures - 92 hours
Preparation for exercise hours - 62 hours
Compulsory assignments - 25 hours
Exam 3 hours
Total 270 hours

Time of examination:
Ordinary exam in June. Re-examination in August.

Registration for the course is automatically a registration for the ordinary examination in the course. Cancellation is not possible. If the student does not participate in the examination, the student will use an examination attempt.
The university may grant an exemption from the rules in case of exceptional circumstances.
The student is responsible for registering for 2nd and 3rd examination attempt.

Examination form at the re-exam may be changed.

Examination conditions:
Ingen.

Form of examination for the certificate:
The test form consists of 2 parts:
1) 3 written assignments.
2) Written exam.

Supplemental information for the form of examination:
1) 3 written assignments that are handed in during the teaching process.
Assessment: Internal, passed / failed (weight 0%). (8102412)

3 assignments that may be prepared by groups of a maximum of 3 students.
Duration: The deadline for submission will be stated on the examination plan.
Place: Home assignment.
Internet access: Allowed.
Handing out the assignment: Course page in Blackboard.
Submission of answer: Through SDUassignment in the course page in Blackboard.
Scope: Max. 6 pages.
Aids: All aids allowed.
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2) Written exam.
Rating: Externally rated, 7-point scale (weight 100%). (8102402)

Duration: 3 hours.
Place: The test takes place at the university. The test is carried out using a personal computer to be able to access the university's wireless network.
Internet access: Forbidden.
Handing out the assignment: Physical in the examination room.
Submission of answer: Through SDUassignment in the course page in Blackboard.
Scope: No limitation.
Aids: Aids allowed but internet access forbidden. It is not allowed to communicate with others.

Programmes:
Economics and Business Administration - Generel Business Administration
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BSc.oecon. (Økonomi) Erhvervsøkonomisk linje
2nd semester, mandatory. Offered in: Odense
BSc.oecon. (Økonomi) Samfundsøkonomisk linje
2nd semester, mandatory. Offered in: Odense
HA(jur.)
6th semester, elective subject. Offered in: Odense