Competition, Conflict, and Coordination: Microeconomics and Political Economy
3.0
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Competition, Conflict, and Coordination is a reading seminar. It builds on and extends topics from elements of microeconomics and looks at modern, strategic models of how people, firms, and governments interact, seeing the importance and pervasiveness of external effects in people’s decision-making and how they can result in coordination failures. We model exchange and examine how different rules affect the potential gains from cooperation and how unequally they are distributed. We draw on insights and evidence from behavioral economics to understand risk, cooperation, altruism, and trust. These insights help us to understand people’s attitudes towards government policies like redistribution, taxation, and the funding of education. The course concludes with a basic introduction to mechanism design looking at applications like taxing behaviors governments want to curb (such as smoking and drinking), the provision of public goods, and designing policies when people have incentives to lie. It is strongly recommended that students have at least one semester of calculus.
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