The topic of the class is information economics. The purpose is to give an introduction to some of the main subjects in this field: risk sharing, moral hazard, adverse selection (signaling, screening), mechanism design, decision making under uncertainty. These subjects (and others) will be treated in more depth in the advanced theory courses on Contract Theory.

Problem Sets

There will be 4-5 homework sets, which are marked but do not directly count in the grade. As an empirical statement, note that YOU HAVE TO DO THE HOMEWORK TO DO WELL.

Books and Articles

I will follow the textbook by MasColel, Whinston and Green. It strikes the right balance between the dry text of Varian and the verbose text of Kreps. If you prefer to read these other books you are welcome to do so, but do note that some of the material I will cover is poorly covered by these texts.

MasColel, A., M. Whinston, and J. Green. Microeconomic Theory. Oxford University Press, 1995.

Kreps, D. A Course in Microeconomic Theory. Princeton University Press, 1990.

Varian, H. Microeconomic Analysis. 3rd ed. W.W. Norton Company, 1992.

Final Exam

There will be a final exam that is closed book.