Key to textbooks used in the course:
MWG = MasColel, A., M. Whinston, and J. Green. Microeconomic Theory. Oxford University Press, 1995.
Kreps = Kreps, D. A Course in Microeconomic Theory. Princeton University Press, 1990.
Varian = Varian, H. Microeconomic Analysis. 3rd ed. W. W. Norton Company, 1992.
| LEC # | TOPICS | READINGS |
|---|---|---|
| 1-4 | Choice Under Uncertainty |
MWG. Chapter 6 C-D, pp. 183-199. Kreps. Chapters 3.2-3, pp. 81-98. Varian. Chapters 11.5-7, pp. 177-190. Holmstrom, B. "Lecture Note: Decision Making Under Uncertainty - Experiments and Value of Information". Rothschild, M., and J. Stiglitz. "Increasing Risk I: A Definition." Journal of Economic Theory 2 (1970). Wilson, R. "The Theory of Syndicates." Econometrica 36, no. 1 (1968): 119-132. Rabin, M. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem." Econometrica 68, no. 5 (2000): 1281-92. Recommended: |
| 5-6 | Moral Hazard |
MWG. Chapter 14. Kreps. Chapter 16. Varian. Chapter 25.4. Hart, O., and B. Holmstrom. "The Theory of Contracts." In T. Bewley (ed.), Advances in Economic Theory -- Fifth World Congress. Cambridge University Press, 1987. |
| 7-8 | Adverse Selection; Signaling |
MWG. Chapter 13 A-C, pp. 436-459. Kreps. Chapters 17.1-3, pp. 625-650. Varian. Chapters 25.9-11, pp. 468-471. Akerlof, G. "The Market for Lemons: Qualitative Uncertainty and the Market Mechanism." Quarterly Journal of Economics 84, no. 3 (1970): 488-500. |
| 9-10 | Adverse Selection; Screening |
MWG. Chapter 13 D, pp. 460-467. Kreps. Chapter 17.2, pp. 629-645. Varian. Chapters 25.6-9, pp. 457-469. Rothschild, M., and J. Stiglitz. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information." Quarterly Journal of Economics 90, no. 4 (1976): 629-649. |
| 11-12 | Mechanism Design |
MWG. Chapter 23 A-D, pp. 857-891. Kreps. Chapter 18, pp. 661-713. Varian. Chapter 23, pp. 414-431. |