230388 :Microeconomics 3 (CentER) (3 ECTS)

General info

Instruction language English
Type of Instruction lectures + tutorials (Lecture schedule)
Type of exams Written final exam (80%) and regular graded homework assignments (20%). (Examination schedule)
Level:Master
Course load:3 ECTS credits
Blackboard InfoLink to Blackboard (When you see 'Guest are not allowed in this course', please login at Blackboard itself)

Lecturer(s)


prof. dr. A.J.J. Talman (Coordinator)

prof. dr. P.M. Kort

I. Shacham


Objectives

The goal of the course is to make the students familiar with the economics of incomplete information.. In case of incomplete or specifically asymmetric information market equilibria fail to be Pareto efficient, a situation known as market failure. Equilibrium concepts from game theory are needed to obtain efficient outcomes in case information to the agents about their preferences or performance is incomplete.


Contents

In the presence of asymmetric information market equilibria often fail to be Pareto optimal. Adverse selection arises when an informed individual's decisions depend on his privately held information that adversely affects uninformed market participants. Informed individuals may find ways to signal information about their unobservable knowledge through observable actions or uniformed parties may screen informed individuals. In case an individual hires another to take some action for him as his agent informational problems arise in this principal-agent setting from hidden actions (moral hazard) and hidden information.


Specifics

Before enrolling all non-CentER students should ask permission to the Director of Graduate Studies in Economics. Please send your request for permission to CentER Graduate School at center-gs@uvt.nl.


Compulsory Reading

  1. A. Mas-Colell, M.D. Whinston, and J.R. Green, Microeconomic Theory, Oxford University Press, 1995, ISBN 978-0-1950-7340-9.


Required Prerequisites

Quantitative Methods (CentER)


Compulsory for

  • Research Master in Business: Finance ( 2016, 2017 )

(04-apr-2018)