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Advanced Microeconomics - 7 ECTS


Date and time

Tuesday 4 October 2022 at 09:00 to Tuesday 13 December 2022 at 16:00

Registration Deadline

Tuesday 4 October 2022 at 09:00

Location

Room TBA, Campus TBA, 2000 Frederiksberg Room TBA
Campus TBA
2000 Frederiksberg

Advanced Microeconomics - 7 ECTS


Event Description

Faculty
Marcus Asplund (MAS), Professor, CBS, Department of Economics
Anette Boom (AB), Associate Professor, CBS, Department of Economics
Karol Szwagrzak (KS), Associate Professor, CBS, Department of Economics
Alexander Christopher Sebald (ACS) , Head of Department, CBS, Department of Economics

Course Coordinator
Anette Boom, Associate Professor, CBS, Department of Economics, ab.eco@cbs.dk

Prerequisites

The course is compulsory for the PhD students of Copenhagen Business School’s Department of Economics, but also open to other PhD students with knowledge of intermediate microeconomics, some econometrics, as well as mathematical tools like multivariate calculus, constrained maximization, and linear algebra, and basic probability and statistics.


Aim

After the course, students shall be able to:

  • develop an understanding of economic theory as applied in cutting edge research across all fields of economics,
  • demonstrate knowledge of the concepts, models, methods and tools of advanced microeconomic theory as discussed during the course,
  • read and understand international research papers expanding the frontier of microeconomic research,
  • apply and adapt advanced microeconomic models to specific research questions,
  • and evaluate microeconomic models used by other scholars.

Course content

The aim of the course is to get the students acquainted with the most important models and methods used in advanced microeconomic theory in order to enable them to apply these models and methods later in their own research. This is done by introducing the students to either very influential and/or recent academic research.

The course covers the following topics:

  1. Decisions Theory (Uncertainty, Risk, and Time preferences)
  2. Game Theory,
  3. Mechanism Design and Contract Theory.

Teaching style
Lectures and student workshops.

Lecture plan
Week 40 - 04.10.2022 - 9-12am & 1-3pm

Introduction (KS and MAS)

Read before the lecture: Chapter 1 in Mas-Colell et al. (1995), Chapters 8, 10, 14 and 17  in Gilboa (2009).

The lecture starts illustrating the interaction between theoretical microeconomic models and empirical research on real-life economic problems. For this purpose, MAS will present  current research on an empirical test of bargaining theory.

The lecture then provides an overview of course and guidance on how to approach the readings in rest of the programme.

Week 41 - 10.10.2022 - 10-12am & 2.30-4.30pm

Revealed Preferences, Risk and Uncertainty (KS)

Chapters 8, 10, 14 and 17 in Gilboa (2009),
Chapters 2 and 3 from Chambers and Echenique (2016).

Week 41 - 11.10.2022 - 10-12am & 1-3pm

Risk and Uncertainty (KS)

Gilboa and Schmeidler (1989), Tversky and Kahneman (1992),  Klibanoff et al. (2005), Bordalo, Gennaioli and Schleifer (2012)

Week 46 - 16.11.2022 - 10-12am & 1-3pm

Time Preferences, Peferences for Flexibility, Temptation and Self-control  (KS)

Bleichrodt et al. (2008), Fishburn and Rubinstein (1982), Gul and Pesendorfer (2001

Week 46 - 18.11.2022- 10-12am & 1-3pm

Stochastic Choice (KS)

 Chapter 7 in Chambers and Echenique (2016), Gul and Pesendorfer (2006)


Week 47 - 25.11.2021 - 10-12am & 1-3pm

Experiments on Belief Dependent Preferences, Guilt and Salience (ACS)

Bellemare, Sebald and Suetens (2018), Bellemare, Sebald and Suetens (2019), Nielsen, Sebald and Sørensen (2021)

Week 48 - 30.11.2022 - 10-12am & 1-4pm

Game Theory (KS)

Osborne and Rubinstein (1994), Chapter 1,2,6 & 11 and 12

The lecture gives you an overview over important game theoretic concepts which are used in the literature on which the rest of the course is based.

Week 48 - 02.12.2022 - 10-12am & 1-3pm

Mechanism Design (KS)

Jackson (2014)

Week 49 - 06.12.2022 - 10-12am

Student Workshops: Moral Hazard, Adverse Selection and Signalling (AB)

Students are divided into three groups and each presents one of the three topics. They can take inspiration from Bolton and Dewatripont (2005)


Week 49 - 07.12.2022 - 10-12am & 1-3pm

Auction Theory (AB)

Myerson (1981), Chapter 1, and 2 in Krishna (2010)

Week 50 - 13.12.2022 - 10-12am & 1-3pm

The Theory of the Firm (AB)

Grosman and Hart (1986)

How to Write a Referee Report? (AB)

Berk, Harvey and Hirshleifer (2017)

Learning objectives
Please see aim.

Exam
Assessment

Attendance is obligatory. In order to pass the course, students have to master three different tasks in a satisfactory manner with the possibility of retaking each of them once.

  1. The students have to either hand in the solutions to one problem-set or to hand in a research proposal (approximately 10 pages) on the basis of the microeconomic theory taught in the class. The hand out date for the problem set is January 4, 2023 and hand in date for either the research proposal or the solutions of the problem set is January 18, 2023.
  2. They have to present one academic research article mentioned in the lecture plan below and comment on the presentation of another student in class.
  3. They have to write a referee report (approximately 4 pages) on an unpublished microeconomic theory paper of their own choice and hand it in until December 31, 2022.

Other
 

Start date
04/10/2022

End date
13/12/2022

Level
PhD

ECTS
7

Language
English

Course Literature
(Indicative)

Selected Chapters from:

Bolton, Patrick and Mathias Dewatripont (2005), Contract Theory, MIT Press: Cambridge, MA.

Chambers, Christopher P. and Federico Echenique (2016), Revealed Preference Theory, Econometric Society Monograph, Cambridge University Press: Cambridge, UK.

Gilboa, Itzhak (2009), Theory of Decision under Uncertainty, Econometric Society Monographs 45, Cambridge: Cambridge University Press.

Jackson, Matthew O., Mechanism Theory (December 26, 2014). Available at SSRN: https://ssrn.com/abstract=2542983 or http://dx.doi.org/10.2139/ssrn.2542983

Krishna, Vijay (2010), Auction Theory, Second Edition, Academic Press: Amsterdam et al.

Mas-Colell, Andreu, Michael D. Whinston and Jerry R. Green (1995), Microeconomic Theory, Oxford University Press: New York and Oxford.

Osborne, Martin and Ariel Rubinstein (1994), A Course in Game Theory, MIT Press: Cambridge, MA.

Selected Journal Articles

1 Decision theory: decision making under risk, uncertainty, and over time
Introduction:  Chapter 1 in Mas-Colell et al. (1995); Chapters 8, 10, 14, 17 in Gilboa (2009)

Revealed preferences: Chambers and Echenique (2016), Rubinstein and Salant (2006), Manzini and Mariotti (2007), Masatlioglu et al. (2012), Chambers et al. (2017), De Clippel and Rozen (2021)

Risk and uncertainty: Tversky and Kahneman (1992) Klibanoff et al. (2005), Gilboa and Schmeidler (1995), Easley and Rustichini (1999), Dekel et al. (2001), Marinacci (2002), Halevy and Feltkamp (2005), Halevy (2007), Ahn (2008), Strza- lecki (2011), Bordalo et al. (2013) Nielsen et al. (2021) Bellemare et al. (2018) Belle- mare et al. (2019)

Time preferences, flexibility, temptation, and self-control: Kreps (1979), Gul and Pesendorfer (2001), Sarver (2008) Bleichrodt et al. (2008), Fishburn and Rubinstein (1982)

Stochastic choice: Chambers and Echenique (2016), Gul and Pesendorfer (2006), Ahn and Sarver (2013), Gul et al. (2014), Manzini and Mariotti (2014), Brady and Rehbeck (2029) Lu (2016), Kitamura and Stoye (2018) Cerreia-Vioglio et al. (2019)

2 Game theory and strategic decision making

Game theory: Chapters 1, 2, 6, 11, 12 in Osborne and Rubinstein (1994), Osborne and Rubinstein (2003), Esponda and Pouzo (2016), Salant and Cherry (2020)

Mechanism design: Jackson (2014), Border and Sobel (1987), Abdulkadiro˘glu and Sönmez (2003), Ben-Porath et al. (2014)

Student workshops on moral hazard, adverse selection and signalling:
Bolton and Dewatripont (2005)

Auction theory: Krishna (2010), Myerson (1981), Pesendorfer and Swinkels (2000), Bulow and Klemperer (2002) Goeree and Offerman (2003), Burkett and Woodward (2020)

The theory of the firm: Grossman and Hart (1986), Levin (2003), Gans (2005), Hart and Moore (2008)

How to write a referee report? Berk et al. (2017)

References
- Abdulkadiro˘glu, A. and T. S¨onmez (2003). School choice: A mechanism design approach. American Economic Review 93 (3), 729–747.
- Adams, A. and J. Abaluck (2018, May). What do consumers consider before they choose? Identification from asymmetric demand response. link.
- Ahn, D. S. (2008). Ambiguity without a state space. The Review of Economic Studies 75 (1), 3–28.
- Ahn, D. S. and T. Sarver (2013).  Preference for flexibility and random choice.
Econometrica 81 (1), 341–361.
- Bellemare, C., A. Sebald, and S. Suetens (2018). Heterogeneous guilt sensitivities and incentive effects. Experimental Economics 21 (2), 316–336.
- Bellemare, C., A. Sebald, and S. Suetens (2019). Guilt aversion in economics and psychology. Journal of Economic Psychology 73, 52–59.
- Ben-Porath, E., E. Dekel, and B. L. Lipman (2014). Optimal allocation with costly verification. American Economic Review 104 (12), 3779–3813.
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- Bleichrodt, H., K. I. Rohde, and P. P. Wakker (2008). Koopmans’ constant dis- counting for intertemporal choice: A simplification and a generalization. Journal of Mathematical Psychology 52 (6), 341–347.
- Bolton, P. and M. Dewatripont (2005). Contract Theory. MIT Press.
- Bordalo, P., N. Gennaioli, and A. Shleifer (2013). Salience and consumer choice.
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- De Clippel, G. and K. Rozen (2021).  Bounded rationality and limited data sets. Theoretical Economics 16, 3–17.
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- Einav, L., A. Finkelstein, S. P. Ryan, P. Schrimpf, and M. R. Cullen (2013). Selection on moral hazard in health insurance. The American Economic Review 103 (1), 178–219.
- Esponda, I. and D. Pouzo (2016). Berk–nash equilibrium: A framework for modeling agents with misspecified models. Econometrica 84 (3), 1093–1130.
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- Goeree, J. K. and T. Offerman (2003). Competitive bidding in auctions with private and common values. The Economic Journal 113 (489), 598–613.
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- Gul, F., P. Natenzon, and W. Pesendorfer (2014). Random choice as behavioral optimization. Econometrica 82 (5), 1873–1912.
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 - Levin, J. (2003). Relational incentive contracts. The American Economic Review 93 (3), 835–857.
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Event Location

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Organizer Contact Information

CBS PhD School
Nina Iversen

Phone: +45 3815 2475
ni.research@cbs.dk

Organizer Contact Information

CBS PhD School
Nina Iversen

Phone: +45 3815 2475
ni.research@cbs.dk