ES10095: Mathematical economics
![]() | 2019/0 |
![]() | Department of Economics |
![]() | 6 [equivalent to 12 CATS credits] |
![]() | 120 |
![]() | Certificate (FHEQ level 4) |
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![]() | CW 50%, EX-TH 50%* |
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*Assessment updated due to Covid-19 disruptions |
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![]() | 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. |
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ES10095 is Compulsory on the following programmes:Department of Economics
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