Using Game Theory To Teach Principles Of Microeconomics
Abstract
The use of game theory to illustrate decision-making and competition in oligopolistic industries has become commonplace in economics. However, little attention has been focused on using game theory to teach other areas of economic theory. For example, game theory can be used to teach the economic principles of marginal analysis and opportunity cost, utility maximization, supply and demand analysis, and industry analysis. This paper provides a case study demonstrating how game theory can be used to teach an entire introductory microeconomics course. While one can certainly adapt the mathematical rigor of game theory to meet virtually any educational level, we believe that principles courses are most in need of a new paradigm since this is where most students receive their first (and often their only) exposure to economics.
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