MS&E 343: Optimal Control Theory
with Applications in Economics

 

Course Page

 

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           Summary

This course provides an overview of classical and nonclassical optimal control applications in economics. The approach is hierarchical. First we discuss single-person decision problems in which a firm or a social planner maximizes an objective function subject to certain constraints. Applications include dynamic pricing, investment, marketing, and the harvesting of renewable resources. Second we introduce games in which several decision makers interact, either in a leader-follower (Stackelberg) setting or in a situation where all players reach their decisions simultaneously. Applications include dynamic oligopolies with open and closed-loop equilibria, capital accumulation games, and the dynamic pricing with a strategic buyer. In the third part of the course, we look at problems, which involve the design of economic mechanisms for the interaction of different players. Applications include screening, market design, and dynamic auctions.

 

<Download Current Syllabus (Version: April 3, 2009)> 

 

Contact Details

 

Instructor

Thomas A. Weber

Terman Engineering Center, Room 442

Phone: (650) 725-6827 [650-PALM-VCR]

Fax: (650) 723-1614

E-Mail: webert@stanford.edu

Office Hours: Tuesday, 5 – 6:15 pm & by appointment

 

 

Teaching Assistance

Naveed Chehrazi                                                                             

Terman Engineering Center, Room 475

Office Hours:Monday, noon – 1 pm
E-Mail: chehrazi@stanford.edu

 

 

Administrative Assistance

Ms. Marilynn Rose                                                                           

Terman Engineering Center, Room 310

Phone: (650) 725-1622

E-Mail: mjrose@stanford.edu

 

 

 

Course Materials (requires authentication)

 

I.                     Introduction

<Download Notes>

 

II.                   Ordinary Differential Equations

<Download Notes>

 

III.                  Optimal Control Theory

<Download Notes>

 

IV.               Game Theory

<Download Notes>

 

V.                 Mechanism Design

<Download Notes>

 

Current Problem Sets & Solutions

·        Problem Set 1 (Due: April 16)  –  Solutions

·        Problem Set 2 (Due: April 30)  –  Solutions

·        Problem Set 3 (Due: May 28)  –  Solutions

 

Current Exams & Solutions

·        Midterm Exam (Take-Home; May 8, noon – May 11, noon)  –  Solutions

·        Final Exam (Take-Home [3 days w/ on-demand pick-up & drop-off; e.g., June 5 – 8])  –  Solutions

 

         Useful Links (Some Stanford Only)

·        Engineering Library × obtain the reference books for this course from the circulation desk

·        Econlit × major database where you can look for published work by keyword, etc. (go to: EBSCOhost → Research Databases ... → Econlit)

·        Inomics × index of Economics conferences (quite comprehensive, but still incomplete)

·        JSTOR × download top journal papers in Business, Economics, Statistics; most recent years not available

·        Social Science Citation Index × useful to forward-search references to key papers that you identify: after searching the paper, go to its full record, click on the number next to “Times Cited”, then on the following page click on “Total”; the citation index sometimes also contains direct links to databases with pdf-copies of the papers

·        Social Science Research Network × large repository of current working papers in the social sciences