Course info

Prerequisite:ECO201
In Advanced Microeconomics (ECO
301), we build on the ECO 201 course
to go beyond the competitive
equilibrium setting and elicit new
causes of market failures. We aim to
study how the pre-sence of
incomplete and asymmetric
information affects the standard analysis
of microeconomic theory. The starting
point is that the presence of asymmetric
information leads to market failures and
open the question of how to regulate and
appropriately design markets to solve or
reduce these failures. We will present
the basics of two important theories and
methods which have been the core of the
modern microeconomic analysis since
1970: the signaling games and the mechanism
design. The students will learn the
tools to analyze markets and interactions
in the presence of incomplete and asymmetric
information. They will learn how
to develop policy tools and how to design
markets to mitigate the issues induced by
the information structure.
More specially, we will cover the following
topics:
❯ Chapter 1: Game theory under incomplete
information (1)
❯ Chapter 2: Asymmetric Information,
Signaling and Application to the Insurance
Market (2)
❯ Chapter 3: The Principal Agent Model
(3)
❯ Chapter 4: Auctions and Mechanism
Design (4)
❯ Chapter 5: Market Design and
Matching
The mathematical treatments are rigorous
but not as much as at the graduate level.
This course will be thus most useful as a
preparation for formal graduate studies in
Economics.
Textbooks:
❯ Osborne, M. J., & Rubinstein, A.
(1994). A course in game theory. MIT
press (Chap 2 & 11)
❯ Jehle, G. A., & Reny, P. J. (2001).
Advanced Microeconomic Theory (Chap
7, 8 & 9)
❯ Laffont, J. J., & Martimort, D. (2009).
The theory of incentives: the principalagent
model. Princeton university press
(Chap 2 & 4)
❯ Krishna, V. (2009). Auction theory. Academic
press (Chap 2 & 5)

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Advanced Microeconomics (ECO 301)

In Advanced Microeconomics (ECO 301), we study advanced topics in undergraduate-level microeconomics. With the highest rigor required at the undergraduate level, we aim to study how analytical tools of modern economics are used in the topics in microeconomics, such as game theory, industrial organization, information economics, contracts, public economics, market design, etc. Students are expected to obtain theoretical understanding beyond the competitive equilibrium, especially with presence of asymmetric information, strategic interactions, as well as applications to market design, and/or mechanism design in general. The mathematical treatments are rigorous but not as much as at the graduate level. This course will be thus most useful as a preparation for formal graduate studies in Economics. Textbooks: ·         Osborne, M., “An Introduction to Game Theory” Oxford University Press, 2004 ·         Jehle G.A. and Reny P.J., “Advanced Microeconomic Theory” (3rd Edition) Pearson, 2011 ·         Hindriks J. and Myles G.D., “Intermediate Public Economics” MIT Press, 2006