Microeconomics is a field taught in the Degree in Economic as a sequence of subjects in different courses. First, an introduction to the topic is studied. Then the topic is divided into four parts: Namely in the second course (1st semester) Consumer Theory is analyzed while production, general equilibrium and public goods are the objective of the Intermediate Microeconomic (2nd semester). Next, Market Power and Strategy is taught in which some notions of game theory are studied in order to study oligopoly. Finally, uncertainty is introduced into some models which have been studied previously.



The general objective of Uncertainty and Contracts is the analysis of uncertainty in Microeconomics.

Some notions of game theory are required to understand this topic. These notions are taught in the course Market Power and Strategy.

In the first part of the program, topics 1, 2 and 3, game theory issues not covered in previous courses are explored, including uncertainty in both static and dynamic games, as well as mixed strategies. Among other applications, the Cournot duopoly under uncertainty, how having more information can hurt, signaling games ...

In unit 4 the theory of decision under uncertainty conditions is analyzed and the Neumann-Morgenstern expected utility function is introduced. In this way, the different attitudes towards risk and their implications are discussed. The course ends with topic 5, analyzing models that include moral hazard and adverse selection.

We study interactive decisions with asymmetric information. Special attention will be focused on situations that emerge in the fields of industrial organization and public economics.



Specific competences of the subject:

1. Basic knowledge of the literature on Uncertainty.

2. Knowledge of the basic models of Information Economy.

3. Apply Game Theory to situations with asymmetric information.

4. Resolution and interpretation of numerical problems that illustrate the analyzed models.

Chapter 1. Bayesian games. Cournot duopoly with imperfect information.

Chapter 2. Mixed strategies.

Chapter 3. Extensive games with imperfect information.

Chapter 4. Uncertainty and Expected Utility.

Chapter 5. Uncertainty and Asymmetric Information.

The course is best suited to a lecture format, although there will also be practical sessions and seminars. In the practical sessions the lecturer will solve numerical exercises related to the subject. In the seminars, students will be asked both to solve questions and numerical exercises.

• Continuous Assessment System
• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 70
  • Realization of Practical Work (exercises, cases or problems) (%): 30

Evaluation system:



- A final exam, FE, (the date is already published) in which students will solve problems and theoretical questions. The work done by students during the course will be evaluated in two exams: E1, (topics 0, 1 y 2) and E2 (topics 3 and 4).

- The final score will be given by the application of the following formula:

max {scoreFE, (0.7·(scoreFE) + 0.2·(scoreE1) + 0.1.(scoreE2)}.

- A final exam.

- Serrano R. y Feldman A. (2013): A Short Course in Intermediate Microeconomics with Calculus, 1ª edition.
- Osborne, M. J., (2004): An Introduction to Game Theory, Oxford University Press; New York, USA.

Basic bibliography

- Nicholson, W. (2006): Microeconomic Theory: Basic Principles and Extensions. Thomson, 8ª edición.

In-depth bibliography

Additional text books:
- Jehle, Geoffrey A., and Philip J. Reny (2001). Advanced Microeconomic Theory, 2nd edition. Amsterdam: Addison-Wesley.
- Gibbons, R.: Un primer curso de Teoría de Juegos. Antoni Bosch, 1992
- Macho, I. y D. Pérez-Castrillo: Introducción a la Economía de la Información. Ariel Economía, 1994.