The objective of the course is expose students to the uses of mathematics in economics. There is no mandatory book for this course. Students with different backgrounds will be able to choose a book with the most suitable level of exposition.
The objective of the course is expose students to the uses of mathematics in economics. There is no mandatory book for this course. Students with different backgrounds will be able to choose a book with the most suitable level of exposition.
The objective of the course is expose students to the uses of mathematics in economics. There is no mandatory book for this course. Students with different backgrounds will be able to choose a book with the most suitable level of exposition.
Rooms: K38 Monday and E37 Wednesday. Instructor: Carlos Ponce. Email: cjponcebruera@gmail.com Office hours: TBA
Teaching Assistant: Carlos Cortez Email: ccortez23@hotmail.com Recitation: Tuesdays 13:30-14:50 Room: E54. Office Hours: TBA Course Description The objective of the course is expose students to the uses of mathematics in economics. We will approach mathematics as a way of demonstrating relationships and formalizing concepts. ______________________________________________________________________ Assessment Midterms: Last week of September and last week of November. Final exam: TBA Homework: Approximately five problem sets will be distributed in class every three weeks or so, depending on lecture progress. Grading: A students overall grade will be calculated as follows:
Overall = 0.4 midterm average + 0.3 final + 0.3 homework average
Reading There is no mandatory book for this course. Students with different backgrounds will be able to choose a book with the most suitable level of exposition. The following is a list of some books in alphabetic order:
1. Carter, M. Foundations of Mathematical Economics. (Harlow: Pearson Prentice Hall, 2011, 3rd Edition). A comprehensive and long book that integrates exercises and economic applications for microeconomic. Very hard reading for master students.
2. Dixit, A.K. Optimization in economics theory. (Oxford: Oxford University Press, 1990). This textbook covers the essentials of optimization in a very intuitive manner. It also offers many useful examples.
3. Jehle, G. and P. Reny. Advanced-Microeconomic Theory. (MIT Press: Cambridge, Massachusetts London, England, 2001). An excellent short book for microeconomics. It contains a very clear and well-ordered appendix that includes much of the material covered in this course.
4. Rangarajan, S. A first course in optimization theory. (Cambridge: Cambridge University Press, 1996). A very rigorous and advanced book although startlingly clear. It has an excellent treatment of dynamic programming.
5. Simon, C.P. and L. Blume. Mathematics for economists. (New York: W.W Norton, 1994). A voluminous book that covers most of the standard topics in mathematical economics but for dynamic programming. The level of difficulty is in between the two books listed below.
6. Sydster, K., P. Hammond and A. Strm. Essential Mathematics for Economic Analysis. (Harlow: Pearson Prentice Hall, 2012, 4th Edition). A useful review of basic math with applications to economic analysis.
7. Sydster, K., P. Hammond, A. Seierstad and A. Strm. Further mathematics for economic analysis. (Harlow: Pearson Prentice Hall, 2008, 2nd Edition). This book covers every topic of the course. The book is harder to read than the previous one.
Tentative Outline
1. Preliminaries. Optimization Problems: A presentation. Sets, Euclidean spaces and functions. Economics examples: consumer and producer theory. 2 Lectures.
2. Functions and Related Sets. Inner product in Euclidean spaces. Level sets, upper and lower level sets of functions. Linear functions. Lines, planes and hyperplanes. Convex sets and convex cones. Economics examples: indifference curves, better and worse sets, and constant returns to scale. 4 lectures.
3. Basic Analysis. Norm and distance in Euclidean spaces. Open sets, closed sets, and compact sets. Continuous functions. Extreme value theorem. Differentiable functions. Homogeneous and homothetic functions. Economics examples. 5 lectures.
4. Unconstrained Optimization. Definitions and first order conditions. Second order conditions. Convex functions: Uniqueness and sufficient conditions. Optimal value function and envelope theorem. Implicit functions and comparative statics. Economic examples. 4 lectures.
5. Constrained Optimization I. Equality Constraints. The theorem of Lagrange. Second order conditions. Convexity and sufficient conditions. Economic interpretation of the Lagrange multipliers. Value function and envelope theorem. Implicit function and comparative statics. Economic examples. 5 lectures.
6. Constrained Optimization II. Inequality constraints. The theorem of Kuhn- Tucker. Second order conditions. Convex and quasi-convex functions: Uniqueness and sufficient conditions. Interpretation of the multipliers. Value function and envelope theorem. Implicit function and comparative statics. 6 lectures.
7. Discrete Time Optimization. Dynamic Programming: Finite and infinite horizon. Histories and strategies: Markovian strategies and value functions. The principle of optimality, backwards induction and Bellman equation. 5 lectures.
(International Series in Operations Research & Management Science 139) Evangelos Grigoroudis, Yannis Siskos (Auth.) - Customer Satisfaction Evaluation - Methods