Advanced Microeconomics


The main purpose of the course is to provide more advanced tools for microeconomic analysis, including general equilibrium and welfare analysis, the identification of market failure and possible policy solutions, modeling strategic interaction and choice under uncertainty and applying these tools to situations of asymmetric information.

General characterization





Responsible teacher

Paulo Côrte-Real


Weekly - Available soon

Total - Available soon

Teaching language



Mandatory Precedence:

- 1100. Principles of Microeconomics


  • Prajit K. Dutta, Strategies and Games - Theory and Practice, 1999, MIT Press (chapters 3, 5, 8, 11, 13, 20, 27, 19, 22 and 24)
  • Hal Varian, Intermediate Microeconomics: a Modern Approach, Norton, New York, 9th edition, 2014 (Chapters on Exchange, Welfare, Externalities, Public Goods, Uncertainty)


Lecture slides are made available at the Intranet learning platform, as well as problem sets for each chapter.

Teaching method

Each week there will be two lectures (1.5 hours each) and one section (also 1.5 hours). Students are expected to attend the lectures and understand the concepts, the models and their underlying assumptions, and to attend and actively participate in the sections that are devoted to applications (both real-life examples and exercises).

Evaluation method

The final exam is mandatory and must cover the entire span of the course. Its weight in the final grade can be between 30 to 70%. The remainder of the evaluation can consist of class participation, midterm exams, in class tests, etc. Overall, written in class assessment (final exam, midterm) must have a weight of at least 50%.

The final grade in the regular exam period (including grade improvement) is based on:

  • A: Final exam;
  • B: Midterm(compulsory);
  • C: Online quizzes.

The final grade will be: 0.6A + 0.3B + 0.1C if A > 0.8; A if A < 8.0

The final grade in the resit exam period is based exclusively on the Resit Exam.

Regular exam period:

Continuous assessment elements (and their weights):

  • Quizzes: 10%
  • Midterm: 30%

Final exam (and its weight): 60%

Resit exam period:

Continuous assessment (and their weights) if different than 100%:

Final exam (and its weight): 100%

Grade improvement in regular exam period:

Continuous assessment (and their weights) if different than 100%:

  • b>Quizzes: 10%
  • Midterm: 30%

Final exam (and its weight): 60%

Grade improvement in resit exam period:

Continuous assessment (and their weights) if different than 100%:

Final exam (and its weight): 100%

Subject matter

  • 1. General Equilibrium and Welfare:

    1-1 General Equilibrium;

    1-2 Welfare.

  • 2. Externalities and Public Goods:

    2-1 Externalities;

    2-2 Public Goods.

  • 3. Game Theory:

    3-1 Static Games with Complete Information;

    3-2 Dynamic Games with Complete Information;

    3-3 Static Games with Incomplete Information;

    3-4 Dynamic Games with Incomplete Information.

  • 4. Uncertainty:

    4-1 Contingent Consumption;

    4-2 Expected Utility;

    4-3 Risk and Attitude towards Risk.

  • 5. Asymmetric Information:

    5-1 Moral Hazard;

    5-2 Mechanism Design and Auctions;

    5-3 Adverse Selection: signaling.


Programs where the course is taught: