**Aims of the course: **

To extend the knowledge of the microeconomic models of the consumer, producer and market equilibrium and to provide PhD students with techniques that are used in solving advanced microeconomic models.

**Language: **English

**Course contents: **

**Lesson 1: Comparative statics (implicit function theorem)**

Applications:

- consumer’s optimal responses to changes in the budget constraint
- changes in equilibrium prices and quantities due to external shocks

**Lesson 2: Differentiating under the integral sign**

Applications:

- sorting/selection models
- optimal sanctions

**Lesson 3: Quantifying welfare in a supply-demand framework**

Applications:

- changes in welfare due to government interventions
- rationing

**Lesson 4 & 5: Choice under uncertainty**

Expected utility, risk aversion, measures of risk aversion, optimal choice of risk

Applications:

- tax evasion
- demand for insurance

**Lesson 6: Asymmetric information**

Applications:

- – moral hazard and incentives
- – signaling

**Readings – selected materials from textbooks:**

- Gravelle, H., and Rees R.: Microeconomics, 3
^{rd}edition, 2004. - Mas-Collel, A., Whinston, M, and Green, J. Microeconomic Theory, Oxford University Press 1995.
- Varian, Hall. 2010. Intermediate Microeconomics
- Kevin M. Murphy: Lecture Notes for Graduate Microeconomics
- Vinogradov, V. Mathematics for Economists: Made Simple. Karolinum 2012

**Papers: **

- Rosen, S.. The Theory of Equalizing Differences, in Handbook of Labor Economics, Chapter 12, 1987.
- Polinsky, A.M. and Shavell, S. The
*Theory of Public Enforcement of Law*, in Polinsky A.M. and Shavell S., Handbook of Law and Economics, Chapter 6, Elsevier 2007. - * Allingham, M.G. and A. Sandmo:
*Income tax evasion: A theoretical analysis*, Journal of Public Economics 1972. - Murphy, K., Shleifer, A., and R. Vishny:
*The transition to a market economy: Pitfalls of partial reform,*Quarterly Journal of Economics, 1992. - Glaeser, Edward, and Erzo Luttmer:
*Misallocation of housing under rent control*, American Economic Review September 2003.

**Examination:**

- Problem sets (100%), 5 or 6 problem sets in total. The solutions will be discussed on TA sessions

**Class times: **

- November 3, 11:00 AM – NB 313
- November 10, 11:00 AM – NB 313
- November 24, 11:00 AM – NB 313
- December 8, 11:00 AM – NB 313
- January 12, 11:00 AM – NB 313
- January 19, 11:00 AM – NB 313