2024/2025 KAN-CEADO1001U Contract, Agency and Game Theory
English Title | |
Contract, Agency and Game Theory |
Course information |
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Language | English |
Course ECTS | 7.5 ECTS |
Type | Mandatory (also offered as elective) |
Level | Full Degree Master |
Duration | One Semester |
Start time of the course | Autumn |
Timetable | Course schedule will be posted at calendar.cbs.dk |
Max. participants | 50 |
Study board |
Study Board for OECON and ECFI
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Course coordinator | |
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Main academic disciplines | |
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Teaching methods | |
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Last updated on 16-01-2024 |
Relevant links |
Learning objectives | ||||||||||||||||||||||
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Course prerequisites | ||||||||||||||||||||||
This is a mandatory course for the MSc in
Advanced Economics and Finance. It is assumed that students have
knowledge similar to the entry requirements for this programme. The
course has 41 class hours and there is a high level of interaction
between lecturer and students, and in general a high work load.
To sign up send a 1-page motivational letter and a grade transcript to ily.stu@cbs.dk before the registration deadline for elective courses. You may find the registration deadlines on my.cbs.dk ( https://studentcbs.sharepoint.com/graduate/pages/registration-for-electives.aspx ) Please also remember to sign up through the online registration.. |
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Prerequisites for registering for the exam (activities during the teaching period) | ||||||||||||||||||||||
Number of compulsory
activities which must be approved (see section 13 of the Programme
Regulations): 2
Compulsory home
assignments
The course includes two obligatory, group-based exercise packs. They must be answered and passed in order to participate in the final exam. The teachers will give feed-back to the individual groups as part of this activity. The exercises are made in groups of 3-4 students. If a student - due to documented illness or failed attempts - does not pass both assignments, the student will be given a final chance to retake this part of the course by handing in a new assignment prior to the final exam. |
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Examination | ||||||||||||||||||||||
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Course content, structure and pedagogical approach | ||||||||||||||||||||||
Contract and agency theory gives a fundamental understanding of motivation and coordination issues under asymmetric information. The theory hereby also provides an analytical basis of micro- and business economics. The course consists of two parts. In the first part, we cover game theoretical results and in particular, we discuss static games, dynamic games including repeated games, and Bayesian games. In the second part, the basic ideas of contract theory are presented. We will in particular analyse contracts, where one party has hidden information (adverse selection) and/or can take a hidden action (moral hazard). We will also discuss some more advanced models with multiple agents, multiple periods etc. In addition, we will cover key aspects of more general mechanism design and discuss incomplete contracts. The aim of this part is to get a good understanding of the basic trade-offs involved, e.g. motivation versus risk sharing, and the basic mechanisms (such as information collection, menu of contracts, signalling etc). The aim is also to train the students to actually make optimal contracts and related mechanisms in simple settings by formulation and solving the associated mathematical programmes. |
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Description of the teaching methods | ||||||||||||||||||||||
Lectures, exercises and continuous feedback. | ||||||||||||||||||||||
Feedback during the teaching period | ||||||||||||||||||||||
Feedback is provided in numerous ways throughout
the course:
During office hours, we can discuss particular problems and give advice on individual academic development questions During classes, we will do have small exercises and discussions of solutions suggested by (groups of) students The group based obligatory exercise packs are returned and commented on in group-meetings with the lecturers. The course is evaluated by the students and the teachers discuss the evaluations with the students. |
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Student workload | ||||||||||||||||||||||
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Further Information | ||||||||||||||||||||||
Part of this course may also be taken as a PhD course for a limited number of PhD students. |
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Expected literature | ||||||||||||||||||||||
An Introduction to the Economics of Information, Ines
Macho-Stadler & K- David Perez-Castrillo, OUP (2nd edition)
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