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.

In Topic 0 some preliminaries are introduced which will be used during the course. Basic calculus is required. Some notions of game theory are also required to understand this topic. These notions are taught in the course Market Power and Strategy.

In Topics 1 and 2 uncertainty is introduced into static and dynamic games allowing to the study of more realistic situations. For instance, some applications as Cournot duopoly under uncertainty, how more information can hurt, signaling games and auctions are studied.

Topic 3 is devoted to study uncertainty into the utility function. Hence the von Neumann and Morgenstern Utility function is studied with detail. Attitudes toward the risk are also described.

Topic 4 contains two types of models: Models which analyzes moral hazard and models which analyze adverse selection.

Goals:

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 skills of the course:

1) To be able to apply acquired knowledge to the resolution of analytical exercises.

2) Capacity for analysis and synthesis.

3) Development of writing communication skills.

Topics:

Topic 0. Preliminaries.

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

Topic 2. Extensive games with imperfect information. Signaling games.

Topic 3. Expected Utility and risk aversion.

Topic 4. The economics of 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.

In the event that the circumstances do not allow face-to-face teaching, face-to-face teaching will be replaced by online teaching using the eGela platform.

• 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)}.



If the health situation does not allow in-person exams, they will be replaced by online exams using the eGela platform.

- 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.