Advanced Microeconomics

The course is compulsory for the PhD students of Copenhagen Business School’s Department of Economics, but also open to other PhD students with knowledge of intermediate microeconomics, some econometrics, as well as mathematical tools like multivariate calculus, constrained maximization, and linear algebra, and basic probability and statistics.

After the course, students shall be able to:

• develop an understanding of economic theory as applied in cutting edge research across all fields of economics,
• demonstrate knowledge of the concepts, models, methods and tools of advanced microeconomic theory as discussed during the course,
• read and understand international research papers expanding the frontier of microeconomic research,
• apply and adapt advanced microeconomic models to specific research questions,
• and evaluate microeconomic models used by other scholars.

The aim of the course is to get the students acquainted with the most important models and methods used in advanced microeconomic theory in order to enable them to apply these models and methods later in their own research. This is done by introducing the students to either very influential and/or recent academic research.

The course covers the following topics:

Introduction (KS and MAS)

Read before the lecture: Chapter 1 in Mas-Colell et al. (1995), Chapters 8, 10, 14 and 17  in Gilboa (2009).

The lecture starts illustrating the interaction between theoretical microeconomic models and empirical research on real-life economic problems. For this purpose, MAS will present  current research on an empirical test of bargaining theory.

Revealed Preferences, Risk and Uncertainty (KS)

Risk and Uncertainty (KS)

Time Preferences, Peferences for Flexibility, Temptation and Self-control  (KS)

Stochastic Choice (KS)

 Chapter 7 in Chambers and Echenique (2016), Gul and Pesendorfer (2006)

Experiments on Belief Dependent Preferences, Guilt and Salience (ACS)

Bellemare, Sebald and Suetens (2018), Bellemare, Sebald and Suetens (2019), Nielsen, Sebald and Sørensen (2021)

Game Theory (KS)

Osborne and Rubinstein (1994), Chapter 1,2,6 & 11 and 12

Mechanism Design (KS)

Student Workshops: Moral Hazard, Adverse Selection and Signalling (AB)

Students are divided into three groups and each presents one of the three topics. They can take inspiration from Bolton and Dewatripont (2005)

Auction Theory (AB)

The Theory of the Firm (AB)

Grosman and Hart (1986)

How to Write a Referee Report? (AB)

Attendance is obligatory. In order to pass the course, students have to master three different tasks in a satisfactory manner with the possibility of retaking each of them once.

Selected Chapters from:

Bolton, Patrick and Mathias Dewatripont (2005), Contract Theory, MIT Press: Cambridge, MA.

Chambers, Christopher P. and Federico Echenique (2016), Revealed Preference Theory, Econometric Society Monograph, Cambridge University Press: Cambridge, UK.

Gilboa, Itzhak (2009), Theory of Decision under Uncertainty, Econometric Society Monographs 45, Cambridge: Cambridge University Press.

Jackson, Matthew O., Mechanism Theory (December 26, 2014). Available at SSRN: https://ssrn.com/abstract=2542983  or http://dx.doi.org/10.2139/ssrn.2542983

Krishna, Vijay (2010), Auction Theory, Second Edition, Academic Press: Amsterdam et al.

Mas-Colell, Andreu, Michael D. Whinston and Jerry R. Green (1995), Microeconomic Theory, Oxford University Press: New York and Oxford.

Osborne, Martin and Ariel Rubinstein (1994), A Course in Game Theory, MIT Press: Cambridge, MA.

Selected Journal Articles
1 Decision theory: decision making under risk, uncertainty, and over time
Introduction:  Chapter 1 in Mas-Colell et al. (1995); Chapters 8, 10, 14, 17 in Gilboa (2009)
Revealed preferences: Chambers and Echenique (2016), Rubinstein and Salant (2006), Manzini and Mariotti (2007), Masatlioglu et al. (2012), Chambers et al. (2017), De Clippel and Rozen (2021)
Risk and uncertainty: Tversky and Kahneman (1992) Klibanoff et al. (2005), Gilboa and Schmeidler (1995), Easley and Rustichini (1999), Dekel et al. (2001), Marinacci (2002), Halevy and Feltkamp (2005), Halevy (2007), Ahn (2008), Strza- lecki (2011), Bordalo et al. (2013) Nielsen et al. (2021) Bellemare et al. (2018) Belle- mare et al. (2019)
Time preferences, flexibility, temptation, and self-control: Kreps (1979), Gul and Pesendorfer (2001), Sarver (2008) Bleichrodt et al. (2008), Fishburn and Rubinstein (1982)
Stochastic choice: Chambers and Echenique (2016), Gul and Pesendorfer (2006), Ahn and Sarver (2013), Gul et al. (2014), Manzini and Mariotti (2014), Brady and Rehbeck (2029) Lu (2016), Kitamura and Stoye (2018) Cerreia-Vioglio et al. (2019)
2 Game theory and strategic decision making

Game theory: Chapters 1, 2, 6, 11, 12 in Osborne and Rubinstein (1994), Osborne and Rubinstein (2003), Esponda and Pouzo (2016), Salant and Cherry (2020)
Mechanism design: Jackson (2014), Border and Sobel (1987), Abdulkadiro˘glu and Sönmez (2003), Ben-Porath et al. (2014)
Student workshops on moral hazard, adverse selection and signalling:
Bolton and Dewatripont (2005)
Auction theory: Krishna (2010), Myerson (1981), Pesendorfer and Swinkels (2000), Bulow and Klemperer (2002) Goeree and Offerman (2003), Burkett and Woodward (2020)
The theory of the firm: Grossman and Hart (1986), Levin (2003), Gans (2005), Hart and Moore (2008)
How to write a referee report? Berk et al. (2017)
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