Professor G Levy, STC. S479 and Professor M Pesendorfer, STC. S878

This course is for MSc Economics, MSc Finance and Economics, MSc Economics and Philosophy, MSc Econometrics and Mathematical Economics (Two Year Programme).  Other graduates on MSc Environmental Economics and Climate Change, MPA Public and Economic Policy/MPA Public Policy and Management/MPA International Development/MPA European Public and Economic Policy/MPA Public and Social Policy may attend with the permission of the MSc Economics programme Director. This will normally only be granted to students who have taken EC400 (Introductory Course in Mathematics and Statistics) held annually in September and achieved the required standard.

Students should have completed an undergraduate degree or equivalent in Economics and EC400 (Introductory Course in Mathematics and Statistics).

The aim of the course is to develop the basic tools for analysing problems of resource allocation used by economists working in research, government and business. The course deals with positive and normative problems. It aims to include modern developments without being overly mathematical, and to develop a capacity to apply economic concepts to real-world problems.

The first part of the course focuses on classical theories of consumer and producer behaviour and on the theory of competitive equilibrium. We will begin with a careful analysis of the optimisation problems of price-taking consumers and firms. We will then analyse market interaction and the formation of prices in the framework of perfect competition. We will conclude with a basic introduction to decision making under certainty and game theory.

The second part of the course focuses on models of imperfect competition and information economics. We begin with an analysis of models of monopoly, oligopoly,  product differentiation, and public goods. Then, we study markets with imperfect and incomplete information including search, adverse selection, auctions, signalling, screening, and moral hazard.  Special emphasis will be given to economic applications.

Lectures EC411: 20 x two-hours MT and LT.

Classes EC411.A: 20 Sessional.

There will be mock examinations at the end of MT and the beginning of ST.

The course will draw on a variety of texts, the main ones being: H R Varian, Microeconomic Analysis (3rd edn), Norton; J R Green, A Mas-Colell & M D Whinston, Microeconomic Theory, Oxford.

More detailed readings will be given at the beginning of the course and some notes will be provided where textbook coverage is inadequate.

A three-hour written examination in the ST.