Markets Incentives and Behavior
Objectives
This is an introductory microeconomics course that aims to develop students? economic intuition and introduce methods to analyse economic problems. The course will cover basic topics in microeconomic theory, including decision-making, markets, market failures, and policy analysis.
General characterization
Code
2741
Credits
3.5
Responsible teacher
Nikita Melnikov
Hours
Weekly - Available soon
Total - Available soon
Teaching language
English
Prerequisites
n/a
Bibliography
Principles of Microeconomics, by N. Gregory Mankiw.
Microeconomics, by Robert S. Pindyck and Daniel L. Rubinfeld.
Intermediate Microeconomics: A Modern Approach (optional), by Hal R. Varian.
Teaching method
The course will combine lectures and interactive tutorials. The students will be expected to perform weekly home assignments that will constitute 40% of their final grade.
Evaluation method
Home assignments (40%)
Final exam (60%)
Subject matter
1: Incentives and utility functions. Utility maximization and the demand curve. Profit maximization and the supply curve.
2: Types of markets. Concept of social welfare and deadweight loss (DWL). Taxes, subsidies, and quotas in a perfectly competitive market. Taxes, subsidies, and quotas in the presence of a monopoly. Costs and benefits of a monopoly in the short and long run.
3: Oligopoly. Bertrand competition. Cournot competition. Comparison of welfare under perfect competition, monopoly, and oligopoly. If we have time: Stackelberg competition.
4: Positive and negative externalities. Market inefficiency in the presence of externalities. Taxes, subsidies, and quotas in the presence of externalities.
5: Markets with incomplete information. Adverse selection. Market of lemons. Pooling equilibria, separating equilibria. Moral hazard. Costly signaling.
6: International trade. Comparative advantage. Welfare effects of international trade. If we have time: Hotelling model of firm differentiation.
Programs
Programs where the course is taught: