Syllabus academic year 2007/2008

Higher education credits: 7,5. Grading scale: TH. Level: A (Second level). Language of instruction: The course will be given in English. TEK145 overlap following cours/es: NEK701 och NEKM31. Optional for: Pi4. Course coordinator: Professor Lars-Gunnar Svensson,, Nationalekonomiska inst. Assessment: There is a written examination at the end of the course. Further examination possibilities will be provided close to this examination. In the course, there are also 1–2 graded home assignments. Further information: For more information please contact the Department of Economics. Home page:

The aim of the course is to give the student deeper knowledge of microeconomic theory regarding the choices of individuals and firms in perfect competition and in imperfect competition using non-cooperative game theory and applying it to economic models and problems.

Knowledge and understanding
For a passing grade the student must

Skills and abilities
For a passing grade the student must

be able to

Judgement and approach
For a passing grade the student must

develop an ability to pursue further studies in the field and to seek and evaluate information with a high degree of independence.

In the first part of the course, the technology that a firm can be expected to use is modelled. Then, we show under what circumstances all relevant technological information can be comprised into purely economic quantities. We then show how efficiency analysis can be performed by DEA analysis. Then, the course focuses on the problem of individual choice and how it can be represented, under certainty and under uncertainty. Various applications of the theory of preferences are analysed, in particular the first proposition of welfare theory and its applications on various asset markets and other forms of decision-making under uncertainty. Finally, the course analyses the dual approach to consumption theory. Here, we give a full characterization of the consequences of individual utility maximization in a market situation. We derive results such as the Slutsky equation, Roy’s identity and Shepard’s lemma. The second part of the course consists of non-cooperative game theory and its economic applications. The focus is on static and dynamic games with full information but we also deal with simpler games with incomplete information, in particular signalling games.

Gibbons R.: A Primer in Game Theory. Harvester Wheatsheaf, 1992
Mas-Colell A, Whinston M D and Green J R: Microeconomic Theory, Oxford University Press, 1995
Supplementary material.