This course introduces into essentials of game theory in the context of economic policy-making. It shows that economic policies, including budgeting, economic policy reforms, regulations of industries, state aid, voting in financial and monetary committees, and interaction with interest groups are strategic interactions that are subject to a rigorous game-theoretical analysis. The course targets three audiences:
- Economists who want to understand, model, and empirically measure how strategic players (companies, interest groups, individual politicians and political parties) shape the economic policy and regulations.
- Students of various fields who are interested in a general introduction into basic game theory, and expect to use game-theoretical tools in various contexts.
- Those (mostly mathematicians) familiar with basic tools from non-cooperative game theory who want to learn a few applications in economic policy-making.
Specifically for economists, understanding political incentives and constraints is useful for the measurement of sovereign risk, political risks, regulatory risks, and to generate sound expectations on policy reforms and policy reversals.
- Teacher: Martin Gregor