This course builds on ECO_2F001 to go beyond the competitive equilibrium setting and introduce new causes of market failures. We aim to study how the presence of incomplete and asymmetric information affects the standard analysis of microeconomic theory. The starting point is that asymmetric information leads to market failures, which opens the question of how to regulate and appropriately design markets to solve or reduce these failures. We will present the basics of two important theories and methods which have been the core of the modern microeconomic analysis since 1970: signaling games and mechanism design.
By the end, you’ll not only understand advanced microeconomic concepts but also develop the skills to solve complex problems, design better institutions, and make informed decisions in settings where information is incomplete. You’ll also learn to benchmark institutional designs against efficiency and revenue criteria, equipping you to tackle novel economic challenges.
The mathematical treatment is rigorous, but not as much as fr a graduate-level course. This course will be thus most useful as a preparation for formal graduate studies in economics.
