|
 Academic Year:
| 2015/6 |
| Owning Department/School:
| Department of Economics |
| Credits:
| 6 |
| Level:
| Certificate (FHEQ level 4) |
| Period: |
Semester 2 |
| Assessment Summary:
| CW 100% |
| Assessment Detail: |
|
| Supplementary Assessment: |
Like-for-like reassessment (where allowed by programme regulations) |
| 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 real-world 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 Kuhn-Tucker Conditions; The Kuhn-Tucker 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, two-person zero sum games, two-person non-zero sum games. Applications. Textbooks: * Intriligator, M.D.: "Mathematical Optimization and Economic Theory". Siam Classics in Applied Mathematics * Simon, C.P, and L, Blume: "Mathematics for Economists" Norton and Sons * Pemberton, M. and N. Rau: "Mathematics for Economists", Manchester University Press. |
| Programme availability: |
ES10095 is Compulsory on the following programmes:Department of Economics
|