Outline syllabus: Consumer behaviour and the principles of rational choice. Representations of technology, profit maximisation and firm behaviour. Decision making under uncertainty. General competitive equilibrium. Introduction to game theory under complete and incomplete information, with applications to oligopoly. Perfect competition as a limiting case. Private information in markets. Basic auction theory. General theory of markets with adverse selection. Contract design in the context of moral hazard problems.
Aims: To introduce students to the most essential topics in microeconomic theory and to provide a broad grounding for the more detailed analysis that is required in subsequent optional courses.
Objectives: Students should acquire a thorough understanding of economic theory relevant to the topics covered.
Reading:
A. Mas-Colell, M.D. Whinston and J.R. Green, Microeconomic Theory, New York: Oxford University Press, 1995.
G. Jehle and P. Reny, Advanced Microeconomic Theory, Addison-Wesley, 2000.
H. Varian, Microeconomic Analysis, 3rd Edition, W W Norton & Co, 1992.
A. Deaton and J. Muellbauer, Economics and Consumer Behaviour, Cambridge University Press, 1980.
R. Gibbons, A Primer in Game Theory, London: Harvester Wheatsheaf, 1992.
