Micro2
Microeconomics 2 LMEC
Grades of the September exam here
Next office hours: see here
Teaching assistant: Marco Magnani (marco.magnani18@unibo.it)
Contents and purpose of the course
The purpose of this course is to introduce students to an analytical study of the basic tools of classical microeconomic theory for perfectly competitive environments and to treat some of the main topics in the field of market failures and information economics. After an introduction to Consumer Choice, Choice Under Uncertainty, Market Equilibrium and the Fundamental Theorems of Welfare Economics, a formal analysis of the main market failures will be offered: Externalities, Public Goods, and Information Asymmetries. Particular attention will be devoted to topics related to Information Economics: Adverse Selection in markets (Signaling and Screening), Principal-Agent Models, Moral Hazard and Adverse Selection in contracts.
Topics
1. Consumer Choice
2. Choice under Uncertainty
3. Market Equilibrium and the Fundamental Welfare Theorems
4. Public Goods
5. Externalities
6. Markets under Adverse Selection (the Market for Lemons). Signaling, and Screening.
7. The Theory of Optimal Risk-Sharing. The Principal-Agent Problem. Contracts under Moral Hazard.
Readings
Suggested readings (by topics) are:
- Consumer Choice, Choice under Uncertainty, Pure Exchange Economies, Production, Market Equilibrium and the Fundamental Welfare Theorems: A. Mas-Colell, M. Whinston and J. Green,Microeconomic Theory, Oxford University Press, 1995, Chap.2 B, C, D. Chap.3 B, C, D. Chap.5 small parts of B and C. Chap.6 B and C. Chap.10 B, (small parts of D). Chap.15 B.
- Externalities and Public Goods: Varian, H., Microeconomic Analysis, III ed., Norton, 1992, chaps 23 and 24.
- The Market for Lemons, Signaling and Screening: A.Mas-Colell, M.Whinston and J. Green, Microeconomic Theory, Oxford University Press, 1995, chap 13.
- The Revelation Principle: Laffont, J.J. and D. Martimort, The Theory of Incentives: The Principal-Agent Model, Princeton University Press, 2001, chap 2.
- Moral Hazard in Contracts Theory: Bolton P. and M. Dewatripont, Contract Theory, The MIT Press, 2005, chap 4 (sections 4.1 and 4.2).
Exam rules
The exam Micro 2 is divided in two parts. The first part is composed by 2 homework assignments. The first assignment can be downloaded from Marco's webpage on November 28 and must be sent to Marco (marco.magnani18@unibo.it) not later than December 6 (before 1pm). The second assignment will be available on December 16. It must be sent to Marco not later than December 23 (before midnight). The final exam cover all the topics treated in the course with open questions. The sum of the two assignments grades will account for the 40% of the final grade (the maximum grade that can be obtained in the two assignments is 12 points, 6 for each assignment). The final exam will account for the 60% of the total grade. Assignments are prepared in groups. Each group is self-arranged and composed by two students at most.
The final exam is written and composed by 2 open questions. Click here to have an idea of possible questions. Other questions here.
The Micro 2 final exam will take place on December 19, 15:15 p.m. room 22.
The subsequent exam date is: January 20, 2017, 11:15 a.m. You will also have one date in September (TBA).
Micro 1 and Micro 2 together form the "integrated course" Microeconomics (I.C.). The grade of Microeconomics (I.C.) will be the average of the grades obtained in Micro 1 and Micro 2. If and only if students already passed Micro 1 in October, they can take the Micro 2 exam alone in December and/or in January. If students did not pass Micro 1 in October, then they must take the exams of Micro 1 and Micro 2 the same day in December, January and/or September.
Course plan