Carnegie Mellon University

Elective Courses

After completing our core courses, you will have the essential economics and data analysis skills needed to think through and analyze complex economic, social, and business problems. Now you will be able to take a deep dive and develop expertise that will allow you to answer questions such as:

  • How should a network of hospitals match donated kidneys to patients?
  • How should crypto-currency markets be regulated?
  • What auction format should the FCC choose to auction off bandwidth?
  • How can businesses adapt to accelerating technological change and the emergence of new markets in Africa and Asia?
  • What economic policies would best mitigate climate change at the lowest cost?
  • How should Uber design surge pricing strategies?
  • How do political institutions shape economic outcomes?
  • How do economic outcomes shape political institutions?

An important caveat: Course numbers do not necessarily indicate the level of course difficulty. For more information about courses, talk with your economics adviser.

Electives Offered this Semester Include:

73-258: Developing Blockchain Use Case

The curriculum highlights the economics underlying the growth in blockchain solutions as well as practical knowledge in how to implement blockchain solutions. The end goal of the new course is for students to propose applications that could function on CMU Coin and create value for the digital token. 

Read More about this new course

73-315: Market Design

This class focuses on how to design mechanisms to allocate scarce resources and how to create successful marketplaces and platforms. We will start with a class of problems and develop a model that helps us identify what a solution to the problem is, what incentive problems might arise, and whether there are mechanisms or designs that might lead to a good solution. Then we'll consider applications where we think about a particular setting and compare what’s done in practice to the theory. The class is divided into two parts: matching and auctions.

Matching examples include problems such as assigning students to schools in large cities where families can ask to be placed outside their neighborhood school, placing doctors in residency positions, matching couples on dating websites, or assigning donated kidneys to transplant patients.

Auction examples include auctions used in financial markets to sell treasury bills and other securities; the auctions used by Google, Microsoft, and Facebook to sell advertising; and the auctions used by governments to sell property rights to radio spectrum and other complex, large-scale assets.

73-341: Within the Firm — Managing Through Incentives

We live in an exciting age of information and knowledge when inspiring employees within a firm becomes increasingly important. Aligning the objectives of workers, managers, and owners by providing them with appropriate incentives becomes an emerging paradigm in the modern business world. In this course, we learn how to reason about incentives between managers and employee, between managers and owners, and within a team of co-workers.

We cover a broad range of topics including objective and subjective performance measurements, relative performance evaluations, relational contracts, and executive compensation. The course relies on business case discussions, rigorous theoretical material, and numerous class activities


73-348: Behavioral Economics

To study how people make choices, we need a theory of human decision-making. In our standard economic models, we assume that economic agents are rational and we explore the implications of such rational behavior. However, the literature in behavioral decision research, which is a study of how people make decisions, shows systematic departures from the rationality assumption. Behavioral economics question the assumption of perfect rationality and uses insights from psychology and other related fields to improve theoretical insights and empirical predictions of standard economic theory. The main objective of this course is to introduce students to this rapidly emerging and important field.

73-359: Benefit-Cost Analysis

This course is intended to introduce the process and typical methods in economic benefit-cost analysis. BCA allows us to determine when project decisions should be made by including consideration of relevant economic aspects. BCA is used to inform government and private decision-making and facilitate more efficient allocation of scarce resources. This course introduces the basic theory and principles of benefit-cost analysis and examines applications of the methodology. Attention is given to such issues as valuing goods and services that are not normally traded in the marketplace (e.g., the value of an individual’s life) and the social rate of discount. Applications are considered in detail.

73-365: Firms, Markets Structures, and Strategy

This course is concerned with the economic analysis of industrial markets that are not perfectly competitive. The effects of imperfect competition on firms' decisions (pricing, location, advertising, research, and development, among others) are reviewed. We begin with a study of optimal pricing policies, including versioning, bundling, and related market segmentation strategies. In the second part of the course, we apply game theory to the study of oligopoly interaction, focusing on pricing and output strategies in a dynamic setting. Finally, we analyze strategies for firm dominance, especially through the deterrence of potential competition. The list of such strategies includes capacity expansion, product proliferation, and exclusive dealing contracts

73-366: Designing the Digital Economy

This class analyzes the economics of e-commerce and technology. It will identify the critical features that differentiate the technology firms from traditional industries and examine the implications for business strategy. The class will discuss topics such as network effects, asymmetric information, price discrimination, and platform markets. To complement the economic theory, we will also consider a case study of various firms throughout the semester. These have three aims: to provide applications for the concepts developed in the lectures; to inform you about different industries; and to help develop your written, rhetorical, and presentation skills.

73-372: International Money and Finance

In the first half of the course, students are introduced to a closed-economy micro-founded, macroeconomic model with a banking system and a central bank. The model is employed to show how central banking shapes equilibrium in the banking system and how banking and central banking help determine employment, output, inflation, and financial market equilibrium beyond the banking system. Bank lending, interest on bank loans, the money stock, and interbank interest rate are explored in terms of the model.

In the second half of the course, students are introduced to a micro-founded, two-country model of international trade, finance, and monetary policy. The model is employed to explain the joint determination of exchange rate, terms of trade, trade balance, financial flows, interest rates, employment, output, and inflation in the global context under fixed and flexible international exchange rate regimes.

The course concludes with in-class briefings of selected countries by student teams that assess current economic conditions and recommend monetary policy actions to stabilize the selected country’s economy.

73-423: Forecasting for Economics and Business

Governments forecast economic indicators (e.g., GDP, job growth, etc.); businesses forecast sales; portfolio managers forecast asset return; the list goes on. Accurate forecasts are critical to robust organizational decision-making. This course will introduce students to modern methods for forecasting in economic and business applications. Topics covered include Bayesian, statistical, and online learning approaches to forecast construction and assessment, univariate and multivariate time series models and algorithms, and principled combination of multiple methods and data sources along with subject matter expertise to improve performance. Methods will be motivated by applications in macroeconomics, technology, marketing, and finance, with cases drawn from forecasting processes in a variety of business and government organizations. Students will implement forecasting methods in R, including in a real data forecasting competition.