A capstone course for the Economics major.
An elective for the Data Sciences minor, and
the Computational Methods minor.
Description
We explore models of firms’ decision making and their market interaction by running, modifying, and creating computer simulations. The models will be based on existing mathematical models which we will study first by describing the models’ Nash equilibria. After building the simulations, we will modify them to next observe and describe how the outcomes are affected by the modifications. We will focus on simulation as an aid in both of the following activities: practicing decision making and explaining firms’ behavior in markets.
Objectives
The dual goals pursued by running and building simulations are (1) learning-by-doing while “playing games” and (2) explaining observed behavior. By studying models that are described mathematically and by building models described in computer code, students will (3) learn the value of formalizing their assumptions about firm behavior and market interaction and (4) appreciate the possible effects of changing assumptions: sometimes those changes that make a model more “realistic” have important effects on the outcomes, and sometimes they have little substantive effect, only making the model more complex and difficult to implement.
Prerequisites:
ECON 251 Intermediate Microeconomics
ECON 252 Intermediate Macroeconomics
ECON 253 Econometric Methods
The development of this course was supported by NSF grants 0722211/0722203 and BCS-079458.