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| Semester | fall semester 2022 |
| Course frequency | Every fall sem. |
| Lecturers | Georg Nöldeke (georg.noeldeke@unibas.ch, Assessor) |
| Content | This course covers four of the topics at the core of modern microeconomic theory: 1. Consumer Theory. We first review the basic microeconomic model of individual decision making in the context of consumer choice, which models demand as a solution to a utility maximization problem, where utility in turn is viewed as a representation of preferences. In applications of consumer theory to fields such as industrial organization and marketing it is often essential to allow for some element of randomness in choice behavior. Hence, this part of the course will also offer an introduction to the kind of stochastic choice models considered in such applications. 2. Decision Under Uncertainty. Many economic decisions contain some element of uncertainty about the outcome of the choice that is made. To model this, most of economics relies on expected utility theory, which allows to capture attitudes towards risk in terms of properties of a so-called von Neumann-Morgenstern (VNM) utility function. This part of the course begins by discussing and illustrating this relationship between risk attitudes and the VNM utility function. It then turns to the foundations of expected utility theory and concludes by considering an extension of the theory that allows for the phenomenon of ambiguity aversion. 3. Social Choice. Social choice theory studies collective decision making, i.e., how individual opinions of members of a society can be combined (e.g., by voting) to reach a decision or a ranking of alternatives. This part of the course introduces the basic concepts and covers Arrow’s impossibility theorem, the Gibbard-Satterthwaite theorem, and single-peaked preferences. 4. Auctions and Mechanism Design. Which procedure should a seller use to maximize her revenue from selling a good? Should she simply post a price? Bargain? Run an auction? This part of the course introduces some of the tools from the theory of mechanism design that economists have developed to answer these and related questions. In doing so, we pay special attention to auctions as these can be used to both motivate and illustrate the theory. Concepts: preferences, utility, optimal choice, risk and uncertainty, expected utility, risk and risk attitudes, subjective probability, ambiguity, aggregation of preferences, social welfare and social choice, strategy-proofness, games with asymmetric information, auctions and more general (selling) mechanisms, revenue equivalence, individual rationality, incentive compatibility, revelation principle, optimal mechanisms Methods: Some Analysis (Sets, Functions, Convexity, Continuity, Compactness,...), Calculus, Static Optimization, Probability, Basic Logic |
| Learning objectives | Students understand the logic of microeconomic models and know important concepts and results relating to the four topics considered in the course. This prepares students to conduct further, independent studies of microeconomic theory as is required for (a) understanding the various elements of microeconomic theory that appear in almost all fields of economics or (b) writing a master thesis in microeconomic theory. |
| Bibliography | Chapters 1, 2, 6, and 9 of the textbook «Advanced Microeconomic Theory» by Geoffrey Jehle and Philip Reny cover most of the content of the course at an appropriate level. Further references to relevant readings will be provided in the syllabus posted to ADAM at the beginning of the semester. |
| Admission requirements | While there are no formal prerequisites, the course presumes the ability and willingness to engage with mathematical arguments at the level appropriate for students majoring in Economics within the MSc in Business and Economics. Consequently, it is strongly recommended that students take 18545-01 Advanced Mathematics for Economists before attending this course. The two mathematical appendices in the textbook «Advanced Microeconomic Theory» by Geoffrey Jehle and Philip Reny provide a good review of the mathematical concepts most relevant for this course. Prior exposure to the material covered in 10134-01 Intermediate Micreconomics is advantageous but not presumed. |
| Course application | Registration: Please enrol in the Online Services before the course starts. EUCOR-Students and students of other Swiss Universities have to enrol at the students administration office (studseksupport1@unibas.ch) within the official enrolment period. In order to get access to ADAM in time, it is best to enrol before the course starts though. Enrolment = Registration for the exam! |
| Language of instruction | English |
| Use of digital media | No specific media used |
| Interval | Weekday | Time | Room |
|---|---|---|---|
| wöchentlich | Monday | 08.15-10.00 | Wirtschaftswissenschaftliche Fakultät, Auditorium |
| wöchentlich | Thursday | 08.15-10.00 | Wirtschaftswissenschaftliche Fakultät, Seminarraum S14 HG.32 |
| Modules |
Modul: Core Courses in Economics (Master's Studies: Business and Economics) Modul: Specific Electives in Economics (Master's Studies: Business and Economics) Module: Core Courses in Business and Economics (Master's Studies: Business and Economics) Module: Field Electives in Economics and Public Policy (Master's Studies: Economics and Public Policy) Module: Specific Electives in Business and Economics (Master's Studies: Business and Economics) Module: Specific Electives in Finance, Controlling, Banking (Master's Studies: Business and Economics) |
| Assessment format | record of achievement |
| Assessment details | Written exam: 19.12.22; 8:15-9:45. WWZ S15: A-Z. |
| Assessment registration/deregistration | Reg.: course registration, dereg: cancel course registration |
| Repeat examination | no repeat examination |
| Scale | 1-6 0,1 |
| Repeated registration | as often as necessary |
| Responsible faculty | Faculty of Business and Economics , studiendekanat-wwz@unibas.ch |
| Offered by | Faculty of Business and Economics |