MICROECONOMIC ANALYSIS

MICROECONOMIC ANALYSIS

Eloisa Campioni

Instructional goals

The course aims at providing knowledge of methods and topics of advanced microeconomic theory, with focus on choices of individual economic agents (consumers, firms) in competitive environments and in strategic settings. Some elements of competitive equilibrium analysis and welfare will also be discussed.

Intended learning outcomes

KNOWLEDGE AND UNDERSTANDING: The student will be able to analyze and understand the main phenomena described and analyzed during the course, in relation to the behavior of individual economic agents and the economic mechanisms of production and exchange. APPLYING KNOWLEDGE AND UNDERSTANDING: At the end of the course, the student must be able to use the tools of theoretical analysis for an advanced understanding of microeconomic phenomena. MAKING JUDGEMENTS: The student will acquire the ability to judge in an autonomous way the microeconomic problems, also in relation to specific applications. COMMUNICATION SKILLS: The student will acquire the specific language of microeconomics in order to communicate precisely the concepts learned. LEARNING SKILLS: The student will learn the methodology of analysis of the main problems related to the microeconomic issues.

Course Contents

Consumer Choice Classical Demand Theory Aggregate Demand Production General Equilibrium Theory Welfare Properties of Equilibrium Introduction to the strategic approach.

Reference Books

A. Mas-Colell, M.D. Whinston and J.R. Green, Microeconomic Theory, Oxford University Press, 1995 Gibbons R., A Primer in Game Theory, Pearson

Teaching Methods

Lectures, Inverted classes, Practice Classes, Presentations.

Assessment Method

Final written exam and active participation in class with interactive discussions.

Thesis assignment criteria

Interview

Week 1 Contenuto sessioni on line e on campus

Course presentation. Consumption set. Budget Set. Preferences.

Week 2 Contenuto sessioni on line e on campus

Preferences and Utility. Utility Maximisation Problem.

Week 3 Contenuto sessioni on line e on campus

Walrasian Demand Correspondence. Indirect Utility Function. Exercises

Week 4 Contenuto sessioni on line e on campus

The Expenditure Minimization Problem. The Hicksian Demand Correspondence. Exercises.

Week 5 Contenuto sessioni on line e on campus

Relation between UMP and EMP. The Kuhn-Tucker conditions (necessary and sufficient). Expenditure function. Law of demand.

Week 6 Contenuto sessioni on line e on campus

Relationship between Demand, Indirect Utility and Expenditure Function.

Week 7 Contenuto sessioni on line e on campus

Utility maximization with endowments. Production set and Production Plans. Exercises.

Week 8 Contenuto sessioni on line e on campus

Strategic interactions: games, extensive-form and strategic-form representation, examples. Prisoners' dilemma.

Week 9 Contenuto sessioni on line e on campus

Iterated elimination of strictly dominated strategies. Nash equilibrium (pure strategies). Examples and economic applications.

Week 10 Contenuto sessioni on line e on campus

Extensive-form games and Subgame Perfect Equilibrium.

Week 11 Contenuto sessioni on line e on campus

General Equilibrium Theory: Basic Model and Definitions. Graphical Analysis of General Equilibrium Economies. The Edgeworth Box. Welfare Properties of Walrasian Equilibria. Exercises. First Fundamental Theorem of Welfare Economics.

Week 12 Contenuto sessioni on line e on campus

Decentralization of Pareto Optimal Allocations and Convexity. Statement and discussion of the Second Fundamental Theorem of Welfare Economics. First Order Condition for Pareto Optimality.