Advanced Microeconomics

• Static strategic games with complete information
• Static strategic games with incomplete information
• General Equilibrium theory

• Social Choice and Voting
• Welfare, Inequality and Poverty

• Moral hazard
• Adverse selection
• Signalling

• Dominant Strategy and Truthful Revelation Mechanisms.
• Vickrey-Clark-Groves Mechanisms.
• Nash Implementation.

• Explain and reflect about the expected utility hypothesis and the resulting von Neumann-Morgenstern utilities
• Explain and reflect upon static non-cooperative games, their possible information structures, and their Nash equilibria
• Explain and reflect upon dynamic non-cooperative games with a finite or an infinite time horizon
• Explain and reflect upon consumer and producer theory in relation with general equilibrium
• Explain and reflect upon the differences between normative and positive analysis
• Explain and reflect upon different forms of Vickrey-Clarke-Groves mechanisms.
• Describe, identify, and elaborate on principal-agent type models in contract theory
• Describe, explain, and identify theories and models on moral hazard, adverse selection, and signaling problems
• Describe and elaborate on the common principles of the aforementioned main models of microeconomics
• Describe and identify the differences between welfare, inequality and poverty
• Describe and identify main impossibilities of social choice theory

• Analyze and compare preferences and find out whether the expected utility hypothesis is satisfied
• Analyze and discuss abstract non-cooperative games of different types
• Compute distinct types of Nash equilibria of explicitly given non-cooperative games
• Analyze and relate microeconomic and game theoretical problems
• Solve specific microeconomic problems by applying theoretical, in particular game theoretical models
• Analyze and discuss principal-agent problems of the contracting theory  
• Criticize and compare underlying assumptions regarding all topics
• Analyze whether a given contracting problem is a moral hazard, an adverse selection, or a signaling problem
• Analyze strategic properties of various mechanisms and voting rules
• Compute inequality and poverty indices
• Solve and analyze general equilibrium of a production economy

• Independently apply models and theories related to the theory of the firm, the theory of the consumer, or to the theory of a multi-person economy
• Identify a need for further development of the models and theories related to microeconomic, in particular contracting issues
• Apply principal-agent type models in new, but related, topics
• Independently apply theories and models on moral hazard problems, adverse selection, or signaling problems
• Use the above knowledge and skills to participate in team work so that the student obtains competences in collaboration and communication.
• Discuss and understand theoretical articles in microeconomics.
• Discuss and understand role of mechanism design within microeconomics
• Discuss and understand role of social choice and voting for public policy
• Discuss and understand application of game theory to various topics within economics

Exercises are an integral part of the course and an independent reading and investigations based on the textbook will occasionally be required.

Active participation, e.g., by presenting a prepared topic within some lessons.

Scheduled classes:

3 hours per week for 15 weeks.

Workload:

Lectures - 45 hours
Preparation, lectures - 125 hours
Homework assignments - 60 hours
Take-home exam - 40 hours