This course builds on ECO201 to go beyond the competitive equilibrium setting and introduce new causes of market failures. We aim to study how the presence of incomplete and asymmetric information affects the standard analysis of microeconomic theory. The starting point is that asymmetric information leads to market failures, which opens 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: signaling games and mechanism design. The students will learn new tools to analyze markets and interactions in the presence of incomplete and asymmetric information. They will also learn how to develop policy tools and design markets that mitigate the issues induced by the information structure.
The mathematical treatment is rigorous, but not as much as fr a graduate-level course. This course will be thus most useful as a preparation for formal graduate studies in economics.
- Teaching coordinator: Combe Julien
- Teaching coordinator: Le Yaouanq Yves