(in Polish) Advanced Microeconomics

obligatory courses

30h, Conversation lecture

The purpose of the course is to familiarize students with the key economic models and frameworks that facilitate the analysis of actors choices and strategic behaviors. The topics include: actors optimization and Walras equilibrium; First and second Welfare Theorem, Asymmetric information, Static Games of complete Information, Dynamic games, Static Games of incomplete Information, Coalition games, Behavioral Game Theory.

Part I. Demand, supply and equilibria

L1: Introduction lecture and math tools

L2: Preferences, Consumers optimization and Walrasian demand (VMA 7,8,9; MWG 2); firms’ profit maximization; Hotelling’s Lemma (VMA 2,3,6 MWG 5C)

L3: Partial and general equilibrium; Walras equilibrium; First and second Welfare Theorem; market failures (VIM 31, VMA 13,17; MWG 15E, 16A-D)

Part II. Advanced analysis of incentives of actors in the market

L4: Random utility model: Perloff and Salop (1980), logit

L5: Signalling and screening, part 1 (VMA 25; MWG 13C)

L6: Signalling and screening, part 2 (VMA 25; MWG 13C)

L7: Moral hazard and adverse selection (VMA 25, MWG: 13A,B)

Part III. Static Games of complete Information

L8: Introduction, overview, uses of game theory, some applications and examples, and formal definitions of: the normal form, payoffs, strategies, best response, dominant strategies.

L9: Pure and Mixed Nash equilibrium, Pareto optimal: definition, existence, iterated elimination of dominated strategies; applications

L10: Zero-sum games: optimal value and optimal strategies; applications.

Part IV. Dynamic games

L11: Extensive games: game tree, perfect and incomplete information structure, Nash equilibrium, subgame perfect equilibrium, applications.

Part V. Static Games of incomplete Information

L12: Bayesian games: intuition, Bayesian Nash equilibrium, applications-the lemons problem

Part VI. Coalition games:

L13: definitions, intuition, the Shapley value, the core, applications.

Part VII. Behavioral Game Theory

L14: Experiments in game theory

Articles to read

Akerlof, George A. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism". The Quarterly Journal of Economics, Vol. 84, No. 3 (Aug., 1970), pp. 488-500.

Bandiera, O (2005) "Contract Duration and Investment Incentives: Evidence from Land Tenancy Agreements in 19th century Italy" Journal of the European Economic Association, forthcoming

Liu, Changzheng i Zhenhong Lin (2017). How uncertain is the future of electric vehicle market: Results from Monte Carlo simulations using a nested logit model, International Journal of Sustainable Transportation, 11:4

Sections 1 and 2 w Perloff, Jeffrey M. i Steven C. Salop (1985). "Equilibrium with Product Differentiation". The Review of Economic Studies, Vol. 52, No. 1 (Jan., 1985),

Textbooks

Varian, H. R., Microeconomic Analysis, W. W. Norton & Co., ed. 3′ (VMA)

Mas-Colell, A., M. D. Whinston, J. R. Green, Microeconomic Theory, Oxford University Press, 1995 (MWG)

Tadelis, Steven. Game Theory: An Introduction. Princeton University Press, 2013.

Gibbons, Robert S. Game Theory for Applied Economists. Princeton University Press, 1992.

Straffin, Philip D. Game Theory and Strategy. Vol. 36. MAA, 1993.

Osborne, Martin J., and Ariel Rubinstein. A Course in Game Theory. MIT press, 1994.

Knowledge: Knows and understands:

WG_1 - to the extent necessary for existing paradigms to be revised - a worldwide body of work, covering theoretical foundations as well as general and selected specific issues - relevant to a particular discipline within the social sciences

WG_2 - the main development trends in the disciplines of the social sciences in which the education is provided

WG_3 - scientific research methodology in the field of the social sciences

WK_1 - fundamental dilemmas of modern civilisation from the perspective of the social sciences

WK_2 - economic, legal, ethical and other relevant determinants of scientific activity in the field of the social sciences

Skills: Can

UW_1 - make use of knowledge from various fields of science, in particular the social sciences in order to creatively identify, formulate and innovatively solve complex problems or perform tasks of a research nature, and in particular to: define the purpose and object of scientific research in the field of the social sciences, formulate a research hypothesis, develop research methods, techniques and tools and apply them creatively, make inferences based on scientific findings

UW_2 - make a critical analysis and evaluation of the results of scientific research, expert activity and other creative works and their contribution to the development of knowledge

Skills: Is ready to:

KK_1 - critically evaluating achievements within a given scientific discipline in the field of the social sciences

KK_2 - critically assessing one's own contribution to the development of a scientific discipline

description of requirements related to participation in classes, including the

permitted number of explained absences; participation in all classes is compulsory, any absence should be justified with an email to one of the lecturers

principles for passing the classes and the subject (including resit session);

The final exam will consist of two parts: the first part will cover topics in the 1st and 2nd parts of the course (listed above), the second part of the exam will cover topics in the 3rd-7th part of the course. The two parts will have an equal weight. To pass the exam, students must score at least 50% from each part. Students who failed the exam have one chance to correct their grade (resit session).

methods for the verification of learning outcomes; Written or oral credit

Exam at the end of the course.

evaluation criteria

At the exam, students will be asked to solve problems using economic models and frameworks, which they learned during the course (possibly, with some minor extension). All answers will be mostly composed of mathematical expression. The basic evaluation criterion is therefore simply whether the answer is mathematically correct. In addition, the questions might request some sketches of the intuition. In this case the primary evaluation criteria will be: clarity of the expression, logic and reference to the mathematical expressions.

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