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Interesting Lectures and Seminars

Market Economy Theory I and II:
Approaching Social Phenomena with Mathematics

Reika Takahashi
1st year student in the Master's Program of the Graduate School of Social Science

Professor Toda

This is sudden, but if you were asked "What do 'organ transplants,' 'searching for a marriage partner' and 'seminar selection' all have in common?" how would you respond? If, like me, you had completed Market Economy Theory I and II, you would be able to answer questions like this. "This is a problem of matching; between donor and recipient, between men and women looking for marriage and between students and professors."

So, what is the power of discovery that the content of these lessons brings about? First, in Market Economy Theory I, in addition to lectures targeting first year students of graduate school, the degree of understanding of mathematics of those taking the course is taken into account and a fair amount of time is devoted to explaining the necessary mathematical knowledge to understand these themes. After this, explanations are given on fundamental issues about general equilibrium theory - for example 'the existence of general equilibrium,' 'the Pareto optimum' and 'the core approximation theorem.' Next, in Market Economy Theory II, lectures are held on various themes that deal with relationships between multiple entities, such as 'social choice theory,' 'Arrow's Impossibility Theorem' and 'bargaining theory.'

Photograph of the teaching materials

In every class, Professor Manabu Toda gives clear explanations while describing numerical formulas and articles on the whiteboard. Thanks to the class, even if a theory appears to be abstract and difficult at first, we can find it to be familiar to us in fact, and we can understand well that even such a theory has developed through diligent examining of actual phenomena. For example, the 'problem of marriage' at the outset - in other words, whether or not a 'stable matching' state is possible when there is no existence of pairs of where both parties have others they like more than their current partner in populations of multiple men and women - it is possible to solve this using theories and methodologies of well-known algorithms proposed by certain researchers.

Unfortunately, even though we would like to explain all kinds of social phenomena, in the real world, experiments are difficult to conduct. Accordingly, we aim to solve these issues by replacing them with a mathematical problem through modeling and understanding this, before then comparing the theories that have been presented with actual problems. I especially recommend these lectures to people that wish to acquire such analytical methods in economics from the basics.