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.
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.
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, behavioural theory is mobilised for the understanding and critical analysis of the results. The following contents are developed:
Monopoly: Inefficiency; regulation; taxation; first, second and third degree discrimination; two-part tariff; double marginalization; auto-competition.
Oligopolies: In simultaneous games with homogeneous goods (Cournot and Bertrand models); in sequential games (Stackelberg and limit pricing models); collusion in cooperative and non-cooperative games (pure and tacit collusion); differentiated goods; links between theory and regulation, particularly competition law.
Network externalities: Monopolistic and duopolistic platforms.
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.
The assessment of the integrated teaching unit is continuous. The final mark for this continuous assessment is divided into two parts: 1. An individual mark on subject content, based on written tests: 60% of the final mark; 2. A "group" mark, based on the group project: 40% of the final mark. 1. As far as the disciplinary content is concerned, the student's individual grade is divided into two parts: a written examination during the four-month term and a written examination during the January term, both of which are closed book. The first examination is held in late October or early November. It covers the individual decision and the beginning of game theory - lectures, practical exercises, game sessions - and counts for 1/3 of the individual grade (and thus 20% of the final grade). The second exam is organised during the January session. It covers the rest of the first part of the subject and the second part of the subject. It counts for 2/3 of the individual mark (and therefore 40% of the final mark). 2. For the group mark, the project is assessed on the basis of its two final deliverables: the written report and the presentation. These two deliverables are described in detail on the course website. They have the same weight (each 20% of the final grade). The evaluation grid for the deliverables is slightly different. The written report is evaluated on the basis of: - The quality of the response provided and the rigour with which the tools seen in the course are used to support the response provided (80%) - Quality of English and presentation of the report (20%) The oral presentation is assessed on the basis of: - Correct identification of the main messages coming out of the work (50%) - The pedagogy with which these messages are presented, the quality of the English and the support (50%) If a student fails this integrated teaching unit, it is possible for him/her to raise his/her individual grade during the second session in August. The student's individual grade is reset to zero and the student takes a written exam that covers all the material seen in the course, in the practical exercises and during the game sessions. In the second session, it is not possible to keep the mark of one of the two exams taken during the year. The group work mark cannot be changed, a student in the second session keeps the mark obtained for his group work. Further useful details can be found on the integrated teaching unit's website.
Donald Campbell, "Incentives: Motivation and the Economics of Information" (2nd ed.), Cambridge University Press, 2006.
Stephen Martin, Industrial Organization: a European Perspective, Oxford University Press, 2001.
A more advanced reference : Paul Belleflamme and Martin Peitz, Industrial Organization – Markets and strategies, second edition, Cambridge University Press, 2015.
| Training | Study programme | Block | Credits | Mandatory |
|---|---|---|---|---|
| Bachelor in Economics and Management | Standard | 0 | 10 | |
| Bachelor in Economics and Management | Standard | 2 | 10 | |
| Bachelor in Economics and Management | Standard | 3 | 10 |