The first part of the course introduces the concept of models in economic research and examines the central idea of homo oeconomicus. Based on these foundations we introduce and discuss several fundamental models of microeconomics and game theory, including preferences and choice under risk, two-person games, and models of asymmetric information.

The second part of the course deals with applications of difference equations to economics. After studying first and p-th order difference equations, as well as the properties of the lag operator, we will analyze a series of macroeconomic applications, including the cobweb model and the multiplier accelerator model.

Students recognize the fundamental place of formal models in economic research. They understand the central role played by homo oeconomicus and are able to counter naive criticism of this model. Students know the most important models in microeconomics and game theory and can explain how they work and how to interpret their results. They understand the methods used to solve first-order and p-th order difference equations and can apply them to solve difference equations in basic macroeconomic applications.

The attendance requirement is met, if a student is present at least 80%. Therefore, students are allowed to be absent for at most two teaching units.

Lectures and interactive solving of exercises in class.

Midterm exam (40%), final exam (40%), and a written modelling project (20%)

Please log in with your WU account to use all functionalities of read!t. For off-campus access to our licensed electronic resources, remember to activate your VPN connection connection. In case you encounter any technical problems or have questions regarding read!t, please feel free to contact the library at readinglists@wu.ac.at.

Knowledge of basic mathematics and quantitative methods is necessary.

The lecturers can be contacted by email.