Information and Market Theory

SØK3005 provides the students with insight into new microeconomic topics compared to those taught at the bachelor level. The first part of the course is on the behaviour of firms and households in markets with incomplete and biased information. Examples from the insurance market, the labour market, and the public sector are used to illustrate the theories. The second part of the course is on industrial organization or the strategic behaviour among firms in markets with imperfect competition. Examples include tacit collusion, entry and exit, and competition policy.

Knowledge
You learn
- theories of decisions under uncertainty, included a good understanding of risk aversion
- the main results in game theory; formulation of static and dynamic games and the associated solution concepts
- about incentive theory; strategic behaviour under asymmetric information

Skills
You should be able to
- use the central concepts in game theory to formulate and solve simple models
- apply the theory of decisions under uncertainty to expand deterministic models with a risk element
- formulate and solve basic problems involving strategic behaviour under asymmetric information

General competence
You should be able to
- read and understand research papers on the topics of this course

Due to 'Experts in Teamwork' there are no lectures during the first three weeks of the semester. Thereafter 2-4 hours of lectures every week and 2 hours of practical assignments every other week.
Compulsory activity: Approved term paper(s)/ exercise(s). Specific requirements will be announced at the beginning of the term.