The learning outcomes consist of various disciplinary and cross-disciplinary skills (or “soft skills”).
1. Disciplinary skills:
- Mastery of the concepts and reasoning related to rational and behavioral decision-making models presented in the course;
- Ability to interpret the results of the models;
- 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, extend reasoning, or transfer it to a new problem.
2. Transversal skills or soft skills:
- Collaborative work management: intra-group organization, autonomy, delegation, etc.;
- Writing techniques necessary to produce a well-structured report in English with bibliographical references;
- Presentation and communication techniques: production by small groups of a video presenting the key results of a joint project in an educational manner, creation of a PowerPoint file or other materials, etc.;
- Use of written and spoken English.
This integrated teaching unit aims to enable students to master disciplinary content both through lectures by teachers—accompanied by practical work and classroom experiments—and through the implementation of a project in small groups of students. Knowledge is therefore both taught and practiced within a project, which is itself a source of learning.
The unit therefore consists of two types of supervised activities:
- courses with disciplinary content, including sessions during which students participate in economic games, either on a computer platform or in other forms;
- a “project” to be carried out in groups, with students being monitored and advised during “coaching” sessions planned during the implementation phase.
1. Disciplinary content sessions:
The first part of the disciplinary content course, Individual Decision-Making and Game Theory, covers the following topics:
In the first section, intertemporal decisions and decisions under uncertainty are analyzed from both a rational theory perspective (expected utility and expected value) and a behavioral theory perspective (beta-delta model of self-control, prospect theory). These decision models are applied to issues of income taxation, retirement savings, investments, and insurance.
In the second part, the basics of non-cooperative game theory are presented. Dominant and dominated strategies as well as Nash equilibrium are examined in the context of simultaneous games. Perfect equilibrium in subgames is presented in the context of sequential games. The solution concepts presented are applied to electoral issues and models of information asymmetry: principal-agent. If time permits, Bayesian equilibrium is discussed in the context of games with incomplete information and applied to screening.
The second part of the course, Industrial Economics, is seen as a central application of the theories and concepts covered in the first part. Behavioral theory is also used to understand and critically analyze the results. The following topics are covered:
Monopoly. Inefficiency, regulation, taxation, first-, second- and third-degree discrimination, two-part pricing, double marginalization, self-competition.
Oligopolies. In simultaneous games with homogeneous goods: Cournot and Bertrand models. In sequential games: Stackelberg and limit price models. Collusion in cooperative and non-cooperative games: pure and tacit collusion. Differentiated goods. Links between theory and regulation, particularly competition law.
Network externalities. Monopoly or duopoly platforms.
2. Project:
The projects to be carried out in small groups will consist, in particular, of:
- analyzing behaviors observed in the laboratory and proposing a behavioral model to explain deviations from rational theory;
- constructing a new model designed to perceive the interest of a particular policy;
- explaining a current event based on a sequential game that rationalizes it;
- describing a game that students model and, if applicable, play in the laboratory, verifying whether behaviors are consistent with theoretical predictions.
Part One: Individual Decision-Making and Game Theory
A. Individual Decision-Making:
Chapter 1: Preferences and Choices
Chapter 2: Intertemporal Decision-Making
Chapter 3: Decision-Making Under Uncertainty
B. Game Theory:
Chapter 1: Simultaneous Games
Chapter 2: Sequential Games
Chapter 3: Repeated Games
Chapter 4: Bayesian Games (if time permits)
Part Two: Industrial Economics
Chapter 1: Monopoly
Chapter 2: Oligopoly
Chapter 3: Monopoly Behavior
Chapter 4: Network Economies
Exercises are regularly assigned. Some exercises are corrected during practical sessions in order to consolidate what has been learned.
Courses with disciplinary content are linked to projects to be carried out by students. In addition, practical work and games organized in the laboratory illustrate—and sometimes precede—the models studied.
Courses with disciplinary content are based on slides and/or video clips. Bibliographic references are also provided for information purposes.
Links will be made between theory and current issues and challenges. In addition to presenting concepts and models, the course aims to make students active, independent, and aware of the practical issues related to the subject.
The integrated teaching unit is assessed on a continuous basis.
The final mark for this continuous assessment is made up of two parts:
1. An individual mark for 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.
If the individual grade is less than 8/20, the weighting changes so that the final grade becomes equal to 80% of the individual grade plus 20% of the group grade.
1. With regard to the subject content, the student's individual grade is divided into two parts: a written exam during the semester and a written exam during the January session, both of which are closed-book exams. The first exam is held in late October or early November. It covers individual decision-making, the basics of game theory, and the basics of industrial economics—lectures, practical work, game sessions—and accounts for half of the individual grade. The second exam is held during the January exam session. It covers the rest of the material and accounts for half of the individual grade.
2. With regard to the group grade, 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's Webcampus website. They carry equal weight. However, the assessment grid for the deliverables is slightly different.
The written report is assessed on the basis of:
- The quality of the response provided and the rigor with which the tools covered in the course are used to support the response (80%)
- The quality of the English and the presentation of the report (20%)
The oral presentation is assessed on the basis of:
- Correct identification of the main messages emerging from the work (50%)
- The pedagogy with which these messages are presented, the quality of the English and the support material (50%)
If a student fails this integrated teaching unit, they can improve their individual grade during the second session in August. Their individual grade is reset to zero and the student takes a written exam covering all the material covered in the course, practical work, and game sessions. In the second session, it is not possible to keep the grade from either of the two exams taken during the year. The group work grade cannot be changed; students in the second session retain the grade obtained for their group work.
Further useful information can be found on the integrated teaching unit's Webcampus 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 | 3 | 10 |