
Academic Year:  2017/8 
Owning Department/School:  Department of Economics 
Credits:  6 [equivalent to 12 CATS credits] 
Notional Study Hours:  120 
Level:  Certificate (FHEQ level 4) 
Period: 

Assessment Summary:  CW 100% 
Assessment Detail: 

Supplementary Assessment: 

Requisites:  
Description:  Aims: To present methods of optimization commonly used in economics; to explain their theoretical basis and give a solid understanding of the wide variety of applications in economics and game theory that these optimization techniques are applicable to. Learning Outcomes: On completing this unit, students should be able to: * Recognise economic and practical problems where static and dynamic optimization methods can be applied fruitfully. * Solve optimization problems analytically and, where appropriate, numerically by means of appropriate software (such as Mathematica). * Implement appropriate solution algorithms, and understand their procedures. * Recognise economic and practical problems in which game theory tools can be used effectively. * Understand and apply the main solutions concepts from game theory, such as equilibrium in dominant strategies, Nash Equilibrium, etc. Skills: Problem solving, abstraction, modelling of realworld optimisation problems, recognising different types of optimisation problems, using mathematical software. Content: I. The Mathematical Programming Problem: Unconstrained Optimization; The Method of Lagrange Multipliers; The Interpretation of Lagrange Multipliers. II. Nonlinear Programming: The Case of No Inequality Constraints; The KuhnTucker Conditions; The KuhnTucker Theorem; The Interpretation of the Lagrange Multipliers; Solution Algorithms. III. Dynamic Optimization: Formal Statement of the Problem; Costate Variables, Hamiltonians, and the Maximum Principle; Interpretation of the Costate Variables. Applications of Dynamic Optimization. IV. Game Theory: Basic concepts of strategic games, twoperson zero sum games, twoperson nonzero sum games. Applications. 
Programme availability: 
ES10095 is Compulsory on the following programmes:Department of Economics

Notes:
