Descriptif

Prerequisite:ECO201
In Advanced Microeconomics (ECO
301), we build on the ECO 201 course
to go beyond the competitive
equilibrium setting and elicit new
causes of market failures. We aim to
study how the pre-sence of
incomplete and asymmetric
information affects the standard analysis
of microeconomic theory. The starting
point is that the presence of asymmetric
information leads to market failures and
open the question of how to regulate and
appropriately design markets to solve or
reduce these failures. We will present
the basics of two important theories and
methods which have been the core of the
modern microeconomic analysis since
1970: the signaling games and the mechanism
design. The students will learn the
tools to analyze markets and interactions
in the presence of incomplete and asymmetric
information. They will learn how
to develop policy tools and how to design
markets to mitigate the issues induced by
the information structure.
More specially, we will cover the following
topics:
❯ Chapter 1: Game theory under incomplete
information (1)
❯ Chapter 2: Asymmetric Information,
Signaling and Application to the Insurance
Market (2)
❯ Chapter 3: The Principal Agent Model
(3)
❯ Chapter 4: Auctions and Mechanism
Design (4)
❯ Chapter 5: Market Design and
Matching
The mathematical treatments are rigorous
but not as much as at the graduate level.
This course will be thus most useful as a
preparation for formal graduate studies in
Economics.
Textbooks:
❯ Osborne, M. J., & Rubinstein, A.
(1994). A course in game theory. MIT
press (Chap 2 & 11)
❯ Jehle, G. A., & Reny, P. J. (2001).
Advanced Microeconomic Theory (Chap
7, 8 & 9)
❯ Laffont, J. J., & Martimort, D. (2009).
The theory of incentives: the principalagent
model. Princeton university press
(Chap 2 & 4)
❯ Krishna, V. (2009). Auction theory. Academic
press (Chap 2 & 5)