Transcript
The College of William and Mary Economics 403: Advanced Microeconomic Theory: Incentives
Professor: Office: Email: Classroom and Time:
Rui Pereira Morton 114, TR 11:00-12:00
[email protected] Integrated Science Center 1127, TR 1400-1520
Course Objectives: Using calculus and elementary probability theory, we examine the ways in which markets and governments create incentives to elicit private information from individuals and firms, and how individual welfare is affected as a result. Course Description: An investigation of contracts and other devices that harness self-interest. The aim is to determine the conditions under which the mechanisms generate socially optimal outcomes. Situations in which the pursuit of self-interest is self-defeating, yielding outcomes that are far from socially optimal, are also treated. Calculus is used to identify and evaluate outcomes. Required course materials: Incentives: Motivation and the Economics of Information. Second Edition D. Campbell, Cambridge University Press. ISBN-13: 978-0-521-53974-6. (Optional) Microeconomic Analysis. 3e, Hal R. Varian. ISBN-13: 978-0-393-95735-8. Grading: No late or make up exams will be accepted/administered. Any conflicts must be approved by the College. Course grades are based on the following items. You need to complete all items to receive course credit. Item Assignments: Test 1: Test 2:
Percent 20% 40% 40%
Tests: I will not change the test date for anyone who has a heavy schedule during the week of our test. I will reschedule a test for someone who is seriously ill, and anyone who is out of town on college business model UN or intercollegiate athletics, for instance. Problem Sets: I will not accept your problem set it if is submitted on paper with jagged edges. I will receive about 800 problem sets this term. Therefore, I am not willing to negotiate deadline extensions, except for someone who is seriously ill, or out of town on college business - model UN, or intercollegiate athletics, for instaance. If you are going to be out of town on College business you are strongly encouraged to submit your problem set early.
Use your lecture notes as a guide to what I consider important and hence what specifically you are likely to be tested on. Use the problem sets as a guide to how you will be tested. 1. Review of Consumer and Producer Theory (a) Calculus Review (b) Constrainted Utility Maximization (c) Cost Minimization (d) Profit Maximization 2. Industrial Organization (a) Monopoly (b) Oligopoly 3. Game Theory (a) Solution and Equilibrium Concepts (b) Types of Games (c) Applications: Duopoly, Oligopoly, Cartels 4. Insurance (a) Probability Theory (b) Decision Making Under Uncertainty 5. Auctions (a) Vickrey Auction (b) Applications: Google Sponsored Search, Spectrum Auctions, Acid Rain; Carbon Permit Auctions 6. Corporate Governance (a) Partnerships (b) The Owner-Employee and Owner-Manager Relationships
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