30L206 :Intermediate Microeconomics: Information Economics

Algemeen

Voertaal Engels
Werkvorm: 2-hour interactive lecture and 2-hour tutorial in the typical week (Collegerooster)
Tentamenvorm: The numerical grade for the course consists of two parts. 70% of your course grade stem from the final written examination, 30% stem from two homework assignments (Tentamenrooster)
Niveau:Bachelor
Studielast:6 ECTS credits
Inschrijving:via Blackboard
Blackboard informatieLink to Blackboard (Als u de melding 'Guest are not allowed in this course' krijgt, dient u nog bij Blackboard in te loggen)

Docent(en)


dr.ir. B.R.R. Willems (coordinator)

dr. E. Cettolin

L. Fiala-Habetinova (TA)


Doel van de cursus (alleen in het Engels beschikbaar)

In most cases, first-year courses in economics assume no differences in the information which agents hold when they interact. For example, buyers and sellers are perfectly informed about the quality of the goods being sold in the market; employers perfectly know the productivity of employees at the time they recruit them and they also know the effort they exert when they are employed; banks and courts perfectly know what borrowers do with loans; etc. This course will relax that assumption and study the extent to which economic outcomes differ when agents do not hold complete information. We will study different types of incomplete information, the problems that this may cause for the efficient functioning of markets, and the various institutions that may help correct or mitigate those problems. The overarching goal of the course is therefore to introduce students to the main themes and tools of Information Economics, a field that witnessed many exciting developments in the past 30 years.

Most of the topics covered in the course have been developed by Nobel Memorial Prize laureates. You will learn about some of the most important contributions to market design by Lloyd S. Shapley and Alvin E. Roth (Nobel Prize winners 2012), to economic governance and the theory of the firm by Oliver E. Williamson and Elinor Ostrom (Nobel Prize winners 2009), to mechanism design by Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson (Nobel Prize winners 2007), to decision-making under uncertainty by Daniel Kahneman and Vernon L. Smith (Nobel Prize winner 2002), to asymmetric information by George A. Akerlof, Michael Spence, Joseph E. Stiglitz (Nobel Prize winners 2001) and William Vickrey (Nobel Prize winner 1996).

 


Inhoud van de cursus (alleen in het Engels beschikbaar)

The course will be structured in three parts. The first part will provide the theoretical tools needed to fully understand the rest of the course, namely specific topics in game theory and decision-making under uncertainty. Then, the second part will study in detail the first type of information asymmetry called moral hazard. The third part will go over a second type of information asymmetry, called adverse selection, and some of the institutions or mechanisms that are often used to overcome it: screening, signaling, auctions and matching algorithms. The focus will be on the theoretical causes of, consequences of, and possible remedies to, such informational limitations. Attention will also be paid to the relevance and validity of those theories in practical (real-life or laboratory) situations.


Bijzonderheden (alleen in het Engels beschikbaar)

The course will comprise both lectures and tutorials. Lectures will introduce the concepts and tools, while tutorials are organized to apply these to specific (numerical) problems. Studying microeconomics, at any level, is not a 'learning-by-heart' activity, but a 'learning-by-doing' endeavor. So, solving specific problem sets, participating in experiments, and interpreting results are a large part of the training. Students will be asked to work on home assignments even when not graded; some of that homework will be discussed and extended during the tutorials. Active participation in all those activities is key to success in this course.


Verplichte literatuur

  1. No one textbook will be required. The course will be based on a number of papers and/or excerpts listed on the course website..


Gewenste voorkennis

Microeconomics 1 and 2, Mathematics 1, and Statistics


Verplicht voor


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(30-aug-2017)