Advanced Microeconomics II: General Equilibrium and Mechanism Design

Teacher(s)

Davila Muro Julio;

Language

English

Main themes

Building upon the tools of decision and game theory acquired in Advanced Microeconomics I, the course is divided in two main sections. In the first section, General Competittive Analysis is developed both in its positive and normative dimensions. In the second section, the problem of designing efficient allocation mechanisms is studied in a general perspective. Incomplete information and incentives issues are introduced. The design of auctions and public good mechanisms is included.

Aims

At the end of this learning unit, the student is able to :
1	The objective of the course is to provide the basic microeconomic tools to be used in the analysis of problems of resource allocation by economists working in research, in businees or in various organisations. The course adopts both a positive and a normative approach. It includes recent advances of the theory and aims at develop-ing the capacity to apply economic concepts to real-world problems.

The contribution of this Teaching Unit to the development and command of the skills and learning outcomes of the programme(s) can be accessed at the end of this sheet, in the section entitled “Programmes/courses offering this Teaching Unit”.

Content

The allocation of resources by competitive markets. The existence of general equilibrium of an Arrow-Debreu Economy. The first and second welfare theorems. Sequential economies with financial assets. Radner equilibria. Incomplete markets. Economies with an infinite horizon. Overlapping generations. Infinitely-lived agents or dynastic economies. 
The allocation of resources among strategic agents. Bargaining. Nash's solution. Kalai-Smorodinski's. The strategic foundation of the Nash bargaining solution. Nash's demand game. Rubinstein's alternating offers bargaining game.

Teaching methods

Lectures and exercises sessions

Evaluation methods

The grade will be determined by a final written examination

Online resources

Lecture notes and homeworks for the exercises sessions available on Moodle 

Bibliography

• Lecture notes and homeworks for the exercises sessions available on Moodle

Teaching materials

• Lecture notes and homeworks for the exercises sessions available on Moodle

Faculty or entity

ECON