Checking date: 10/07/2020

Course: 2020/2021

Microeconomics III
Study: Master in Economic Analysis (68)


Department assigned to the subject: Department of Economics

Type: Compulsory
ECTS Credits: 9.0 ECTS


Students are expected to have completed
Microeconomics I and Microeconomics II
Competences and skills that will be acquired and learning results.
-Build and analyze models with asymmetric or incomplete information. -Familiarize with the classic applications of these models to real life economic problems. -Grasp the magnitude of the problems in real economies due to asymmetric or incomplete information. -Develop the skills to use the analytical tools of the models of asymmetric or incomplete information: adverse selection, moral hazard, screening, signaling, mechanisms, contracts.
Description of contents: programme
Introduction to topics and tools of modern theory of information. 1. Games with Incomplete Information: elements of a game of incomplete and/or asymmetric information, Bayes-Nash equilibrium, perfect equilibrium. 2. Adverse selection and moral hazard: unobservable characteristics (screening and signalling); unobservable actions: ex ante, interim and ex post efficiency. 3. Introduction to contract theory: menus of contracts, guaranties, bilateral contracts: insurance, credit, labor. 4. Introduction to mechanism design: Bayesian implementation with transferable utility, applications: monopoly, auctions, public goods, bilateral trade. Dominant and ex post implementation with transferable utility.
Learning activities and methodology
In person classes that are streamed online and recorded. Weekly problem sets solved in group work. These are discussed in the practical sessions. Combining textbook material with up-to-date discussion of the current research frontier.
Assessment System
  • % end-of-term-examination 60
  • % of continuous assessment (assigments, laboratory, practicals...) 40
Basic Bibliography
  • Boergers (with a chapter by Kraehmer and Strauss) . An Introduction to the Theory of Mechanism Design. Oxford University Press. 2015
  • Bolton and Dewatripont . Contract Theory. MIT Press. 2005
  • Mas Colell, Whinston and Green. Microeconomic Theory. Oxford University Press. 1996
Additional Bibliography
  • Myerson. Game Theory. Harvard University Press. 1997
Detailed subject contents or complementary information about assessment system of B.T.

The course syllabus and the academic weekly planning may change due academic events or other reasons.

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