Graduate Microeconomics

Main textbook for the first semester Eesti keeles

The course covers standard topics on Microeconomics, that are covered in most graduate programs in Economics. The course lasts two semesters, first part covers «classical» topics (household theory, firm theory, equilibrium, etc), and the second part discusses topics from the last 20-30 years (applications of game theory, economics of information). The main focus of the course is the development of the skills for understanding and creating mathematical economic models.

Due to the latest changes in structure of graduate studies in Estonia, the course is taught as an obligatory part of the program for both MA students, and PhD students of Economics in Tartu University.

Structure

Structure, lecture notes, problem sets (in Estonian):

Course information

Materials

In Fall semester we will follow quite directly Varian textbook, which is required reading for everyone (link to library, link to bookshop). Some topics are complemented with sections from other textbooks and articles.

In Spring semester we will cover topics, that are mostly not included in Varians book, therefore we will use different newer textbooks, and additional materials will be distributed.

Detailed list of required and supplementary readings will be available at the homepage.

Preliminary list of references and other useful books

  1. Akerlof, George. The Market for "Lemons": Quality Uncertainty and the Market Mechanism. -- The Quarterly Journal of Economics, Vol. 84, No. 3. (1970), pp. 488-500.
  2. Arrow, Kenneth. Uncertainty and the Welfare Economics of Medical Care. -- The American Economic Review, Vol. 53, No. 5. (1963), pp. 941-973.
  3. Aumann, Robert. Agreeing to Disagree. -- The Annals of Statistics, Vol. 4, No. 6. (1976), pp. 1236-1239.
  4. Bernoulli, Daniel. Exposition of a New Theory on the Measurement of Risk. -- Econometrica, Vol. 22, No. 1. (1954), pp. 23-36.
  5. Binmore, Ken; Ariel Rubinstein; Asher Wolinsky. The Nash Bargaining Solution in Economic Modelling. -- The RAND Journal of Economics, Vol. 17, No. 2. (1986), pp. 176-188.
  6. Bolton, Patrick; Mathias Dewatripont. Contract Theory. -- (15 February 2005).
  7. Borch, Karl. Equilibrium in a Reinsurance Market. -- Econometrica, Vol. 30, No. 3. (1962), pp. 424-444.
  8. Camerer, Colin. Behavioral Game Theory: Experiments in Strategic Interaction. -- (01 March 2003).
  9. Cho, In-Koo; David Kreps. Signaling Games and Stable Equilibria. -- The Quarterly Journal of Economics, Vol. 102, No. 2. (1987), pp. 179-222.
  10. Debreu, Gerand. Theory of Value: An Axiomatic Analysis of Economic Equilibrium. -- (25 May 1972).
  11. Diamond, Douglas; Philip Dybvig. Bank Runs, Deposit Insurance, and Liquidity. -- The Journal of Political Economy, Vol. 91, No. 3. (1983), pp. 401-419.
  12. Friedman, James. A Non-cooperative Equilibrium for Supergames. -- Review of Economic Studies, Vol. 38, No. 113. (1971), pp. 1-12.
  13. Fudenberg, Drew; Jean Tirole. Game Theory. -- (01 October 1991).
  14. Gibbons, Robert. A Primer in Game Theory. -- (01 June 1992).
  15. Harsanyi, John. Games with randomly disturbed payoffs: A new rationale for mixed-strategy equilibrium points. -- International Journal of Game Theory, Vol. 2, No. 1. (December 1973), pp. 1-23.
  16. Holmstrom, Bengt. Moral Hazard and Observability. -- The Bell Journal of Economics, Vol. 10, No. 1. (1979), pp. 74-91.
  17. Jehle, Geoffrey; Philip Reny. Advanced Microeconomic Theory (2nd Edition). -- (19 July 2000).
  18. Kahneman, Daniel; Amos Tversky. Prospect Theory: An Analysis of Decision under Risk. -- Econometrica, Vol. 47, No. 2. (1979), pp. 263-292.
  19. Kahneman, Daniel. Choices, Values, and Frames. -- (25 September 2000).
  20. Kalai, Ehud; Meir Smorodinsky. Other Solutions to Nash's Bargaining Problem. -- Econometrica, Vol. 43, No. 3. (1975), pp. 513-518.
  21. Kreps, David. A Course in Microeconomic Theory. -- (21 February 1990).
  22. Krishna, Vijay. Auction Theory. -- (01 March 2002).
  23. Laffont, Jean-Jacques; David Martimort. The Theory of Incentives : The Principal-Agent Model. -- (26 December 2001).
  24. Lazear, Edward; Sherwin Rosen. Rank-Order Tournaments as Optimum Labor Contracts. -- Journal of Political Economy, Vol. 89, No. 5. (1981), pp. 841-64.
  25. Leontief, Wassily. The Pure Theory of the Guaranteed Annual Wage Contract. -- The Journal of Political Economy, Vol. 54, No. 1. (1946), pp. 76-79.
  26. Macho-Stadler, Ines; David Perez-Castrillo; Richard Watt. An Introduction to the Economics of Information: Incentives and Contracts. -- (01 February 2001).
  27. Mas-Colell, Andreu; Michael Whinston; Jerry Green. Microeconomic Theory. -- (01 June 1995).
  28. Milgrom, Paul; Robert Weber. A Theory of Auctions and Competitive Bidding. -- Econometrica, Vol. 50, No. 5. (1982), pp. 1089-1122.
  29. Nash, John. The Bargaining Problem. -- Econometrica, Vol. 18, No. 2. (1950), pp. 155-162.
  30. Osborne, Martin; Ariel Rubinstein. A Course in Game Theory. -- (12 July 1994).
  31. Osborne, Martin; Ariel Rubinstein. Bargaining and Markets (Economic Theory, Econometrics, and Mathematical Economics). -- (28 April 1990).
  32. Rubinstein, Ariel. Perfect Equilibrium in a Bargaining Model. -- Econometrica, Vol. 50, No. 1. (1982), pp. 97-110.
  33. Salanie, Bernard. The Economics of Contracts: A Primer. -- (15 March 1997).
  34. Shapiro, Carl; Hal Varian. Information Rules: A Strategic Guide to the Network Economy. -- (01 November 1998).
  35. Spence, Michael. Job Market Signaling. -- The Quarterly Journal of Economics, Vol. 87, No. 3. (1973), pp. 355-374.
  36. Tirole, Jean. The Theory of Industrial Organization. -- (01 January 1988).
  37. Varian, Hal. Microeconomic Analysis. -- (01 February 1992).
  38. Vickrey, William. Counterspeculation, Auctions, and Competitive Sealed Tenders. -- The Journal of Finance, Vol. 16, No. 1. (1961), pp. 8-37.

Electronic materials
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Background reading:

1) Original version of the tutorial in English. One can also check the homepage of the course Preparation course: mathematical methods in economics which includes additional materials and exercises.