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## DECISION MAKING METHODS FOR ECONOMICS

CODE 80675 2021/2022 6 credits during the 3nd year of 8699 Economics (L-33) GENOVA 6 credits during the 3nd year of 8766 Mathematical Statistics and Data Management (L-35) GENOVA MAT/09 Italian GENOVA (Economics) 1° Semester AULAWEB

## OVERVIEW

The course introduces students to optimization models and decision support methods used for the solution of decision problems arising in economics and social sciences applications. Some of the problems have been already studied from a teorethical view point in the 1° and 2° year of the Economics bachelor courses thus the attention in this course will be focused on obtaining the problem solutions using specific software.

## AIMS AND CONTENT

### LEARNING OUTCOMES

The course aims to provide students with adequate knowledge of the main quantitative methods of support to decision-making in the field of economics and to be able to use, with some mastery, the reference software environments. From a methodological point of view, specific situations of competitive, co-operative, gaming-related interaction situations, and convex programming algorithms will be illustrated to optimize certain objective functions, such as profit maximization and utility and minimization of the Costs.

### AIMS AND LEARNING OUTCOMES

The course aims to present the subject in its theoretical, methodological and applicative aspects in order to provide students with knowledge of the applicable models and methodologies. The theoretical and practical laboratory aims to provide the student with the knowledge and skills to use specific software to solve the practical problems faced.

At the end of the course the students should have acquired skills that allow them to understand, describe and solve different types of real problems, developing models and solution methods and using, with a certain mastery, the reference software environments.
In particular, students at the end of the course will:

• Know and understand the main tools and methods of decision analysis that allow them to formalize individual decisions in the economic and social application field.
• Know the main elements of a problem of choice in terms of decision makers involved, type of data available, variables, constraints and objectives.
• Apply the acquired knowledge to describe, formalize and solve the problems and the related single-decider optimization models as well as those with social and economic interaction components in situations of applicative interest.
• Use both the conceptual and the operational level of the knowledge acquired with independent evaluation and critical reasoning skills, developing original models applicable in different application contexts.
• Have acquired a correct terminology and technical language to clearly communicate the main elements of the decision problem under consideration.
• Have acquired useful skills in the field of applied mathematics to access the most quantitative master's degree classes in the economic and quantitative area.
• Have developed learning skills that will allow them to deepen and apply independently the main topics of the discipline in the working contexts in which they will operate.

### PREREQUISITES

Suggested: Mathematics

### TEACHING METHODS

Lectures, analysis of case studies, computer lab exercises and lessons using ad hoc software tools.

In the case of health emergency situation, the updated distance and blended teaching methods will be communicated on the Aulaweb page of the course (registration is required and recommended).

### SYLLABUS/CONTENT

For each part of the course, the theoretical discussion, intended to provide basic content, will be complemented by the practical/laboratory part in the computer classroom using appropriate software tools (Excel solver, Lindo and Lingo).

Part I:

• Introduction to decision-making and problem solving: from real problems to mathematical models.
• Decision models classification.
• Introduction to non-linear, convex, linear and integer mathematical programming.
• Resource allocation problems arising in the production of goods and services
• Supply and demand matching problems
• Linear programming, duality, economic interpretation and sensitivity
• Introducing non-linear hypotheses on prices and costs

Part II:

• Study of functions in several variables: unconstrained maxima and minima.
• Constrained optimization, Lagrangian functions and economic interpretation of Lagrange multipliers.
• Consumer choice models and utility maximization.
• Company choice models: cost minimization and profit maximization.
• Models for selecting investments in risky conditions.

Part III:

• Decision trees and decision theory in conditions of uncertainty and risk.
• Optimization of the expected economic value of decisions.
• Utility Theory.
• Introduction to Game Theory.
• Study and modeling situations of interactions between subjects, competitive and cooperative. Pure and mixed strategies. Game theory and optimization.

The text books and other additional handouts for foreign students will be communicated at the beginning of the course and published on the course Aulaweb page

## TEACHERS AND EXAM BOARD

### Exam Board

ELENA TANFANI (President)

DANIELA AMBROSINO

ANNA FRANCA SCIOMACHEN

## LESSONS

### TEACHING METHODS

Lectures, analysis of case studies, computer lab exercises and lessons using ad hoc software tools.

In the case of health emergency situation, the updated distance and blended teaching methods will be communicated on the Aulaweb page of the course (registration is required and recommended).

Sem: I

15 Sept 2021

### Class schedule

DECISION MAKING METHODS FOR ECONOMICS

## EXAMS

### EXAM DESCRIPTION

The verification of the achievement of the expected learning outcomes is evaluated with a written test and with a project work (alone or in groups) and / or a practical test in the computer lab.

### ASSESSMENT METHODS

The written test is aimed at assessing the degree of knowledge and learning of the theoretical topics discussed during the lectures. While the critical evaluation and reasoning and the ability to apply the acquired knowledge are evaluated through the project work and/or practical exam.

### Exam schedule

Date Time Location Type Notes
22/12/2021 12:00 GENOVA Scritto
19/01/2022 12:00 GENOVA Scritto
02/02/2022 12:00 GENOVA Scritto
11/05/2022 12:00 GENOVA Scritto Appello straordinario riservato esclusivamente ai laureandi a.a. 2020/21
09/06/2022 12:00 GENOVA Scritto
23/06/2022 12:00 GENOVA Scritto
22/07/2022 12:00 GENOVA Scritto
01/09/2022 12:00 GENOVA Scritto

### FURTHER INFORMATION

Not compulsory.

The course is published  on aulaweb. All students are invited to periodically consult the page of this course on the AulaWeb portal (http://www.aulaweb.unige.it/), where they will find further information and updates.

It should be noted that to take into account the findings of last year's teaching assessment questionnaires, more time will be devoted to laboratories and case studies.