Advanced microeconomic theory II

ECS505 Advanced microeconomic theory II

  • Topics

    Topics

    The course is organized in two parts. Part A covers central topics in non-cooperative game theory. It presents relevant theory and equilibrium concepts for static and dynamic games, and for games of complete and incomplete information.

    Part B provides a solid introduction to contract theory. It covers first contracting problems where the agent has private information or can take actions that are unobservable to the principal in settings where complete contracts are feasible. It then covers the theory of incomplete contracts.

    Both parts A and B of the course apply the theory in several areas, including industrial organization, auctions, labour markets and financial economics.

  • Learning outcome

    Learning outcome

     The purpose of this course is to give a solid introduction to microeconomic analysis of strategic interaction (games) and contracting, including principal-agent relationships. It introduces the basic analytical tools that are necessary to conduct research in any field in economics where such issues are of importance.

     

    At the end of the course, students should

    Knowledge:

     

    • have a thorough understanding of the main results in game theory and contract theory;

     

    Skills:

    • be able to apply the methods to study problems related to strategic behaviour of individual agents in settings of symmetric and asymmetric information.

     

    General competence:

    • be able to address a microeconomic problem in these areas by structuring it as a mathematical model and to obtain useful economic predictions through the use of mathematical tools and a sound economic intuition.

  • Teaching

    Teaching

    Regular lectures and assignment classes.

  • Required prerequisites

    Required prerequisites

    Students should have good knowledge of microeconomic concepts and tools at the intermediate level (such as SAM2 and SAM4).

  • Requirements for course approval

    Requirements for course approval

    Two written assignments.

  • Assessment

    Assessment

    4-hour written school exam.

  • Grading Scale

    Grading Scale

    Pass/fail

  • Course code

    Course code

    ECS505

  • Computer tools

    Computer tools

    None.

  • Semester

    Semester

    Spring

  • Literature

    Literature

    Andreu Mas-Colell, Michael Whinston & Jerry Green (1995) Microeconomic Theory (Oxford: Oxford University Press).

    Patrick Bolton and Mathias Dewatripont (2005) Contract theory, The MIT Press

     

    Recommended reading

    Robert Gibbons (1992) A Primer in Game Theory (New York: Prentice Hall)

    Drew Fudenberg and Jean Tirole (1991) Game Theory, The MIT Press

    Salanie, B. The Economics of Contracts, The MIT Press, 1999.

    Laffont, J-J. and D. Martimort, The Theory of Incentives, The Princeton University Press, 2002.

Overview

ECTS Credits
4
Teaching language
English.
Semester
Spring

Course responsible

Eirik Kristiansen, Department of Economics and Trond Olsen, Department of Business and Management Science