Advanced Microeconomics part 2 2400-ZU1MIZ2
The purpose of the course is the introduction to the basic concepts and models from the field of microeconomics that were not covered in the course ‘advanced microeconomics, part I’. The course covers the topics of profit maximization, market equlibrium, game theory, asymetric information. In addition to traditional concepts, we will discuss several examples of scientific papers that rest on micro theory. We will also discuss the applications of microeconomic theory to the analysis of contemporary problems: the increase in income inequality in developed countries and the optimal design and costs of climate policies.
Type of course
Course coordinators
Learning outcomes
Students should be familiar with the following topics:
1. Profit maximization; demand and supply of firms; Impact of technology on income inequality - Katz and Murphy (1992) *+
2. Partial vs general equilibrium; Walras equilibrium, First and second welfare theorems
3. Externalities tragedy of commons+; optimal investment in climate mitigation+; Monopoly; setting price and quantities
4. Introduction to game theory; strategies; normal form; Nash equilibrium in mixed and pure strategies
5. Sequential games; extensive form; Subgame Perfect Nash Equilibrium; Repeated games
Oligopoly: Cournot; Bertrand; Stackelberg
6. Asymmetric information: signalling; How PhDs could help in business?+; Optimal investment under asymmetric information * – Bandiera (2007); Principal-Agent model
7. Exercises
8. Students’ projects presentations
* Topics that are based on the scientific articles (see the list below). During lectures we will discuss the simplified versions of the model. You need to know only the models discussed during the lectures.
+ Topics that students could choose for the research project (see below). These are not required for the exam.
KW01, KU01, KU03, KK01
Assessment criteria
You can get up to 100 points.
Up to 80 points you get from the final exam
Up to 20 points you get from the research project
To pass the course, you need at least 40 points (50%) from the exam and at least 50 points (50%) from the entire course.
Bibliography
Reading list:
Bandiera, O (2005) "Contract Duration and Investment Incentives: Evidence from Land Tenancy Agreements in 19th century Italy" Journal of the European Economic Association, forthcoming
Goldin, Claudia i Lawrence F. Katz (2007). "The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005," NBER Working Papers 12984, National Bureau of Economic Research, Inc.
Sections I – IV w Katz, Lawrence F. i Kevin M. Murphy (1992) "Changes in Relative Wages, 1963-1987: Supply and Demand Factors" The Quarterly Journal of Economics, Vol. 107, No. 1 (Feb., 1992), pp. 35-78
Textbooks:
Varian, H. R., Intermediate Microeconomics, ed. 7 (VIM)
Varian, H. R., Microeconomic Analysis, W. W. Norton & Co., ed. 3′ (VMA)
Required to score above 80%: Mas-Colell, A., M. D. Whinston, J. R. Green, Microeconomic Theory, Oxford University Press, 1995 (MWG)
The textbook are there to help you. The exam will include only the topics that were discussed during the lecutres.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: