Review of probability theory, deterministic decisions, decisions under uncertainty, partitions, priors, posteriors, Bayesian updating, Harsanyi doctrine and the problem of consistent posterior beliefs, temptation and self-control, and other relevant classic or modern topics under the discretion of the lecturer, if time permits.

On satisfying the requirements of this course, students will have the knowledge and skills to:
1. Identify the main axiomatic models of individual decision-making that lie at the heart of economic theory.
2. Explain the fundamental concepts and ideas of decision theory.
3. Have a working knowledge of expected utility theory.
4. Demonstrate capacity for deductive reasoning through explaining concepts and relations between different ideas of decision theoretic models.
5. Understand how to use mathematical models to capture the ideas of temptation and self-control, as well as ambiguity aversion.
6. Know the difference between risk and uncertainty.
7. Apply the techniques in simple examples in economic models.

Final examination, student presentations, and problem sets.

Two lectures per week with tutorials throughout the semester.

ECON2125 Mathematics for Economists A and ECON2101/2111 Microeconomics 2 (P or H).

none

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