GAME THEORY provides and studies formal models of situations in which there exists interaction between the decisions of a set of rational agents’. Adequate notions of ‘solutions’ either in a normative or a positive sense are proposed and investigated. These models are also applied to economics and politics, and are tested against empirical data from real world or from experiments.
SOCIAL CHOICE The central problem of social choice is the aggregation of preferentes and the dificulties that collective decision-making entails. Examples of social choice are passing laws in parliament or elections.
WELFARE ECONOMICS tries to evaluate the well-being of an economy as to the efficiency and the equality. Welfare economics typically takes individual preferences as given. Welfare economics typically takes individual preferences as given and stipulates that a social state is more efficient than another if at least one person prefers that state and no one else opposes it. The other aspect treats income distribution and measure of inequalities.
INDUSTRIAL ORGANISATION studies the structure of and boundaries between firms and markets and the strategic interactions of firms. The study of industrial organization adds to the perfectly competitive model real-world frictions such as limited information, transaction costs, costs of adjusting prices, government actions, and barriers to entry by new firms into a market that may be associated with imperfect competition.
BEHAVIORAL AND EXPERIMENTAL ECONOMICS is a methodological approach to economics. Essentially, it is based on the regularities observed in the interactive behaviour of people in controlled experiments which simulate competitive situations.