Applied Economics

Applied Economics is offered as a Minor field of study only for students majoring in Computers and Information Systems, Operations Management, and Marketing.

Faculty and Research Interests

Simon School faculty who do research and sometimes teach in Applied Economics include: John B. Long Jr. and Jerold B. Warner.

Courses and Descriptions

• AEC 501  Applied Economics Seminar I (non-credit). A forum for the presentation of recent and current research. Faculty, PhD students, and outside speakers present papers on their current research and/or discuss recent work by others in the field.
• AEC 502  Applied Economics Seminar II. A continuation of AEC 501.
• AEC 503  Organizational and Competitive Strategy Seminar (same as STR 501). A continuation of AEC 501 and 502.
• AEC 505  Mathematical Techniques in Economics. The course introduces mathematical tools especially useful in economics, econometrics, and finance. Topics include a review of differential and integral calculus, matrix algebra, and various constrained-optimization and mathematical-modeling techniques. Offered in the summer, primarily for entering doctoral students.
• AEC 510  PhD Workshop in Applied Economics. A forum for the presentation of ongoing and completed research projects by PhD students in the economics core. Third- and fourth-year PhD students are expected to actively participate in presenting their work and in refereeing the presentations of others.
• AEC 511  Advanced Price Theory I. The first of a three-course sequence providing a survey of the substance and methods of contemporary price theory for students preparing to do research. Generally, this course covers the economic behavior of individuals and firms in a competitive market setting. Individual behaviors examined include responses to price and income changes, intertemporal planning (e.g., saving), household production, labor supply, investment in human capital, search, and reactions to uncertainty about future assets and goods prices. For firms, the implications of value maximization for input demands and output supplies are explored thoroughly. Managerial choices related to multiple products, intertemporal production planning, and uncertainty are explicitly modeled. Some extensions to monopoly behavior are considered. Finally, some implications of competitive firm behavior for industry (single market) equilibrium are examined. These include the technological determinants of industry responses (entry, exit, quantity changes, price changes) to economic shocks such as shifts in demand for an industrys product.
• AEC 512  Advanced Price Theory II (pre-requisite: AEC 511). AEC 512 covers the basic topics in noncooperative game theory. It begins with the study of representations of games in normal and extensive form and solution concepts, including Nash, subgame perfect Nash, perfect Bayesian, sequential, perfect, proper, and correlated equilibria, iterated dominance, and rationalizability. The relation between the normal and extensive form and among the various solution concepts is considered. The results for repeated games and mechanisms, including the revelation principle, are studied. Applications of interest to the students are considered as time permits.
• AEC 513  Advanced Price Theory III (pre-requisite: AEC 512). This course provides an introduction to the theory and practice of industrial organization. Broad areas of application include static oligopoly models, two-stage games, and games with infinite horizons. Concepts from game theory, such as Nash, subgame-perfect, and perfect Bayesian equilibria will be used as needed. Special topics may include contracts, patents, licensing, bundling, tying, buyer-seller networks, switching costs, price discrimination, mergers, and entry barriers. Students will read and critique journal articles and areas for future research will be highlighted.
• AEC 516  Analysis of Economic Policy (offered at discretion of instructor). A study of alternative positions on economic policy and a critique of their basic reasons.
• AEC 521  Advanced Topics in the Organization of Industry. Concentrates on unsettled areas in industrial organization, exposing students to potential thesis and research projects. Specific topics vary from year to year. Typical current topics are theory of conglomerate mergers, analysis of advertising and scale as barriers to entry, quality competition, and market responses to costly information.
• AEC 525  Mathematical Economics I (same as ECO 481, 4 credit hours, prerequisite: AEC 505). This course covers the use of optimization theory in economic analysis. The topics covered include finite-dimensional optimization (unconstrained optimization, Lagranges Theorem, the Kuhn-Tucker Theorem), the role of convexity in optimization, parametric continuity of solutions to optimization problems, and finite- and infinite-horizon dynamic.