ECC5840

Information, incentives and games ( 6 points, SCA Band 2, 0.125 EFTSL)

Leader: Associate Professor Vai-Lam Mui

Offered:
Clayton First semester 2006 (Day)

Synopsis: This unit provides students with training in information economics and applied game theory. Discussion of key concepts in game theory; the nature of different kinds of information asymmetries (whether the informed party has private knowledge about certain events, whether he/she can undertake actions unobservable to others); and economic implications. Explore how different incentive mechanisms (signaling by the informed party and screening by the uninformed party) can be used to mitigate the impact of asymmetric information.

Objectives: Upon completion of this unit, students will have an understanding of the key concepts in game theory, as well as the nature and economic implications of different kinds of information asymmetries; an understanding of how different incentive mechanisms - for example, signaling by the informed party and screening by the uninformed party--may be useful in mitigating the impact of asymmetric information on economic activities; the ability to critically evaluate the extent to which a particular application of information economics and game theory succeeds in generating new testable implications regarding the phenomena under study; the ability to construct formal models to study the importance of informational problems in explaining phenomena that are of interest to them.

Assessment: Assignments: 15% + Research Essay (3500 words): 35% + Examination (2 hours): 50%

Contact Hours: 3 hours per week

Prerequisites: ECC5650