Mathematical Optimization And Economic Theory Intriligator Pdf

Owning Department/School: Department of Economics

Level: Certificate (FHEQ level 4)

Assessment Detail:

Coursework (CW 100% - Qualifying Mark: 35)

Supplementary Assessment: Like-for-like reassessment (where allowed by programme regulations)

Description: Aims:
To present methods of optimization commonly used in economics; to explain their theoretical basis and give a solid understanding of the wide variety of applications in economics and game theory that these optimization techniques are applicable to.

Learning Outcomes:
On completing this unit, students should be able to:
* Recognise economic and practical problems where static and dynamic optimization methods can be applied fruitfully.
* Solve optimization problems analytically and, where appropriate, numerically by means of appropriate software (such as Mathematica).
* Implement appropriate solution algorithms, and understand their procedures.
* Recognise economic and practical problems in which game theory tools can be used effectively.
* Understand and apply the main solutions concepts from game theory, such as equilibrium in dominant strategies, Nash Equilibrium, etc.

Skills:
Problem solving, abstraction, modelling of real-world optimisation problems, recognising different types of optimisation problems, using mathematical software.

Content:
I. The Mathematical Programming Problem: Unconstrained Optimization; The Method of Lagrange Multipliers; The Interpretation of Lagrange Multipliers.
II. Nonlinear Programming: The Case of No Inequality Constraints; The Kuhn-Tucker Conditions; The Kuhn-Tucker Theorem; The Interpretation of the Lagrange Multipliers; Solution Algorithms.
III. Dynamic Optimization: Formal Statement of the Problem; Costate Variables, Hamiltonians, and the Maximum Principle; Interpretation of the Costate Variables. Applications of Dynamic Optimization.
IV. Game Theory: Basic concepts of strategic games, two-person zero sum games, two-person non-zero sum games. Applications.
Textbooks:
* Intriligator, M.D.: "Mathematical Optimization and Economic Theory". Siam Classics in Applied Mathematics
* Simon, C.P, and L, Blume: "Mathematics for Economists" Norton and Sons
* Pemberton, M. and N. Rau: "Mathematics for Economists", Manchester University Press.

Programme availability:

ES10095 is Compulsory on the following programmes:

Department of Economics

UHES-AFB04 : BSc(Hons) Economics and Mathematics (Year 1)
UHES-AKB04 : BSc(Hons) Economics and Mathematics with Year long work placement (Year 1)