• Understand normative theories regarding the goals of public and organizational policies
• Formulate and apply economic and game theoretic concepts to model and understand the design and implementation of policies and interventions
• Identify appropriate theories to analyze policy making problems
• Explain how empirical or case studies relate to theoretical models

The course uses economic and game theoretic tools to introduce business and social science students to the policymaking process. By developing general principles for thinking about strategy and policymaking, the lessons of the course can be applied across a wide spectrum of problems where incentives in organizations matter. Examples include conflict resolution, the design of compensation schemes, counter-terrorism, regulation and tax compliance, and other strategic decision making problems.

The course starts by exploring the normative foundations of policymaking—political theory, social choice theory, and the Paretian and utilitarian theories about goals. It then introduces game theoretic models—externalities, coordination problems, and commitment problems—that uncover opportunities for policy to improve social welfare. Finally, it studies how the policy making process creates technological and incentive constraints that shape policy outcomes. Throughout, concepts and models are illustrated and reinforced with discussions of empirical evidence and case studies.

Political Economy for Public Policy (2016) by Ethan Bueno de Mesquita, Princeton University Press