Andy McLennan's Class Page

Noncooperative game theory extends the fundamental method of economic analysis--the investigation of the consequences of individual maximization of welfare--to realms where agents interact directly, rather than through markets. Although fundamental concepts were developed in the 1940's and 1950's, interest in game theory among economics has been especially intense during the last twenty five years, with numerous theoretical advances and applications to many different applied fields.
This course develops the most fundamental models of game theory (finite normal form and extensive form games) and investigates the application of the concept of Nash equilibrium to these models. We will also study the application of these ideas to elections, industrial competition, auctions and biological evolution.
- Class Page for Semester 2 of 2006

The main focus of the couse is the valuation of risky assets by financial markets. Fundamental concepts include the relationship between asset prices and the value of consumption in various contingencies, implications of absence of arbitrage for asset pricing, ooptimal decision making in the face of uncertainty, optimal portfolio selection, and the relationship between asset prices and the distribution of risk across consumers.
Throughout the emphasis will be on rigorous modelling and precise understanding of logical and mathematical foundations.
- Class Page for Semester 2 of 2006

Economics is a quantitative discipline, and in recent decades the discourse of the profession has become substantially more precise, in the sense of utilizing formal mathematical models. This has many benefits: assumptions and lines of reasoning become completely explicit; exactly understood results can be used with confidence as a basis for more sophisticated reasoning; novel insights can be derived from the application of sophisticated mathematical methods. The purpose of this course is to acquaint the students with the central mathematical methods utilized in the mathematical approach to economic analysis, and to show how these methods are applied in the the central theories of economics. Specifically, the focus will be on optimization in the presence of constraints, emphasizing the approach derived from multivariate calculus.
- Class Page Fall 2004
Lectures notes from the (quarter long) version of the class taught five years ago.
- Lectures Winter 99

This is the University of Sydney version of the Economics 4113 course described above. As a matter of adjusting to the Sydney scene, I am starting out by using the materials prepared by John Carson for the 2004 version of the course and used last year by Vladimir Smirnov. But students may also benefit from studying the material related to Economics 4113.
- Class Page for Semester 1 of 2006

This is the final segment of the first year introductory microeconomics sequence. The material consists of an introduction to game theory, followed by some social choice theory, welfare economics, and the economics of information. Since the switch to semesters it has gone from being the last quarter (hence 1/3 of the sequence) to being the final half semester (1/4 of the sequence) so I am posting the lecture notes from the final time it was given as a quarter course, since these are more complete.

The noncooperative theory of games provides a very general description of environments in which rational agents interact. Unlike the theory of perfect competition, in which no agent has a tangible effect on the reward of another agent, or the theory of monopoly, in which only one agent has market power, noncooperative game theory allows one to describe interactions in which several agents' choices jointly determine the agents' rewards. This course examines noncooperative games in normal and extensive form, and the equilibrium concepts that have been proposed for such games, as well as some applications.

Last updated on Jan 13, 2004.