Decision Tools [ LBIRA2104B ]

Icampus

General skills for a bio-engineering bachelor, animal and vegetal productions, introductory management, micro-economics and introduction to game theory

- Part 1 After an introduction on the agricultural production economy, the role of major production factors in the efficient management of agricultural firms is characterized. The mains tools for analysis and decision making are explained and used in practical exercises. The main agricultural and food branches are outlined. The development of the agricultural sector in Belgium and in Europe is analysed.

- Part 2 The course outlines, explains and compares various decision problems and decision-making tools within the unifying framework of game theory. It distinguishes (and shows the complementarities of) statistics and economic analysis. Complex decisions under uncertainty in situations with several interacting decision-makers are illustrated with relevant examples.

a. Contribution de l'activité au référentiel AA (AA du programme)

1.1-1.5, 2.1-2.5 game theory, agency, farm management techniques

3.2-3.3 matching real situations with archetypal problems

3.4 solving mathematical models (game theory and operation research)

3.6-3.8 interpreting the results of abstract models (course+homeworks)

4.1-4.2 identifying typical problems in complex situations

4.4-4.7 drawing lessons from abstract models for complex, real situations

5.1-5.4 & 5.7 farm management techniques

5.8, 7.1 & 7.5 agency and contract theory (game theory)

6.2 & 6.6-6.7 homeworks

b. Formulation spécifique pour cette activité des AA du programme

At the end of the course, students will be able :

(Part 1)

- to identify and to compare specific characteristics of the major agricultural production factors from the viewpoint of economics and management.

- to understand and to use the mains decision-making tools available at the farm level and at the regional level.

- to analyse the structure, functioning and performance of the main agricultural production and agricultural branches.

- to apply the concepts and analysis techniques in supervised exercises.

(Part 2)

- to understand in depth various decision problems and decision-making tools commonly relied upon in fields relevant for the students.

- to formulate strategic (i.e. interactive) decision problems in a rigorous mathematical framework (game theory).

- to pick up adequate methods for solving multi-agents decision problems under uncertainty.

- to interpret the results of mathematical models of strategic interaction with a view to formulating practical recommandations for problem-solving.

Written exams, mainly exercises for both parts

Classes and homeworks

Part 1)

1.     Present discounted value

2.     The main agricultural production factors

3.     Decision making tools : global and partial budgets, linear programming, program planning, cluster and factorial analysis, risk analysis

4.     The main agricultural branches (including agro-food branches)

5.     Transversal issues : taxes, prices, energy costs, pollutions, animal feed, organic production,...

(Part 2)

1. Elements of games in developped forms (including VNM utility)

2. Non-cooperative bargaining (the Rubinstein model and variants)

3. Agency (1) : moral hazard and boiling-in-oil contracts

4. Agency (2) : screening vs statistical discrimination

5. Agency (3) : signaling