Microeconomics Iii

In HE1001 Microeconomics I and HE2001 Microeconomics II, we have covered the core tenets of decision making by firms and individuals, and how perfect competition translates this into efficient outcomes under specific conditions. The main aim of this course is to extend our framework to contexts with less than ?perfect? settings. We will first study the basics of game theory, analysing strategic interactions between small numbers of agents and discuss its applications. Subsequently, we will study various kinds of market frictions and how they can lead to sub-optimal outcomes in the market, covering possible solutions. This will include classical ones like asymmetric information, classical externalities and common access and also newer ones like information technology. Lastly, we will also introduce behavioural economics and how social and psychological elements can be applied to traditional topics in Economics.