Theory
Theoretical considerations are used differently in research and in the chair’s advisory activities. Therefore, two central areas of economic theory maintain a prominent position: Allocation theory and game theory.
Allocation theory and neoclassical welfare theory are the background of a major part of economic analysis and the resulting economic advice. The reasoning behind the effort to base political analysis and recommendations on allocation theory follows from the conviction that the purpose of economic science is to contribute to the resolution of the social efficiency problem. In this way economists possess the comparative advantage. However, taking this advantage, it is inevitable to make use of the actually existing basis of allocation theory.
Game theory is a very powerful device to display and analyse strategic interaction. Economic interactions often show features of strategic interaction and can, therefore, only be handled and understood by employing the analytical instruments of game theory.