Course 5EN912 – Microeconomics III
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 microeconomics models.
Lesson 1: Comparative statics (implicit function theorem)
- 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
- sorting/selection models
- optimal sanctions
Lesson 3: Quantifying welfare in a supply-demand framework
- changes in welfare due to government interventions
Lesson 4 & 5: Choice under uncertainty
Expected utility, risk aversion, measures of risk aversion, optimal choice of risk
- tax evasion
- demand for insurance
Lesson 6: Asymmetric information
- – moral hazard and incentives
- – signaling
Readings – selected materials from textbooks:
- Gravelle, H., and Rees R.: Microeconomics, 3rd edition, 2004.
- Mas-Collel, A., Whinston, M, and Green, J. Microeconomics 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
- 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.
- Problem sets (100%), 5 or 6 problem sets in total. The solutions will be discussed on TA sessions
- November 3, 11:00 AM
- November 10, 11:00 AM
- November 24, 11:00 AM
- December 8, 11:00 AM
- January 12, 11:00 AM
- January 19, 11:00 AM