Project: economic strategies and decisions [ECGEB366]

Learning outcomes

The learning outcomes consist of various disciplinary and transversal competences (or "soft skills"). 1. Disciplinary skills : - Mastery of the concepts and reasoning related to the rational and behavioural decision models presented in the course; - Ability to interpret model results ; - Ability to apply these models to the analysis of concrete economic phenomena and to formulate public policy recommendations; - Critical attitude towards the models taught and their assumptions: identification of their strengths and limitations; - Ability to perceive the links between theory and concrete reality, to extend a line of reasoning or to transfer it to a new problem. 2. Cross-cutting competencies or soft skills : - Management of collaborative work: intra-group organisation, autonomy, delegation, etc; - Writing techniques necessary to produce a well-structured and referenced report in English; - Presentation and communication techniques: production by small groups of a video presenting in an educational way the main results of a project carried out together, construction of a PowerPoint file or other media, etc; - Creativity ; - Use of written and spoken English.

Objectives

This integrated teaching unit aims to enable the student to master disciplinary content both through the teachers' presentation - accompanied by practical work and experiments carried out in class - and through the implementation of a project in small groups of students. Knowledge is thus both taught and practised, within a project, the latter also being a source of learning. The unit therefore consists of two types of supervised activities: - courses with disciplinary content, including sessions in which students participate in economic games, on computer platforms or in other forms; - a project to be carried out in groups, with students being monitored and advised in planned coaching sessions during the implementation phase.

Content

1. Sessions with disciplinary content : The first part of the disciplinary course, Individual Decision and Game Theory, develops the following content: In the first part, inter-temporal decisions and decisions under uncertainty are analysed both from the point of view of rational theory (expected use and expected utility) and from that of behavioural theory (beta- delta self-control model, prospect theory). These models of decisions are applied to issues of income taxation, amounts saved for retirement, investments and insurance. In a second part, the basics of non-cooperative game theory are presented. Dominant and dominated strategies as well as Nash equilibrium are discussed in the context of simultaneous games. Subgame perfect equilibrium is presented in the context of sequential games. Bayesian equilibrium is covered in the context of incomplete information games. The solution concepts presented are applied to electoral issues or in models of information asymmetry: principal-agent and screening. The second part of the disciplinary course, Industrial Economics, is seen as a central application of the theories and concepts seen in the first part. In the same way, experiments are conducted in class and behavioural theory is mobilised for the understanding and critical analysis of the results. The following contents are developed: Oligopolies in simultaneous games: various models of the Cournot and Bertrand type. Collusion in cooperative and non-cooperative games: pure and tacit collusion. Sequential game models: Stackelberg and limit price model, also analysed under the question of whether equilibria are perfect in subgames. The links between innovation and market structure. The links between economic theory and regulation, in particular competition law and its recent applications (anticompetitive agreements and abuse of dominant position) Various themes: network economics, ... 2. Project : The projects to be carried out in small groups will include - the analysis of behaviours performed in the laboratory and the proposal of a behavioural model to explain deviations from the rational theory; - the construction of a new model for the perceived value of a particular policy; - the explanation of a current event on the basis of a sequential game that rationalises it; - the description of a game that the students model and, if necessary, play in the laboratory, checking whether the behaviour is in line with theoretical predictions.