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Microeconomic Analysis

This course is mandatory for the Master of Science in Economics.

Module Description

The course provides an advanced introduction to the fundamental concepts of microeconomics. It begins by examining the conditions under which individual choices can be represented by utility functions, and introduces the framework of utility maximization along with its dual problem of expenditure minimization. Building on this, the course turns to the principles of welfare economics.

We then study decision-making under uncertainty, focusing on the expected utility framework and its applications. This is followed by an introduction to general equilibrium theory and the analysis of market failures. Finally, the course considers strategic interactions through the lens of game theory.

Material and Further Information

All relevant information for this course will be available on Blackboard. Please ensure that you are registered for the course and able to receive emails via Blackboard.

Course Overview

  1. Classical Demand Theory (Choice, Utility Maximization, Expenditure Minimization, Welfare)
  2. Choice under Uncertainty
  3. General Equilibrium and Market Failures
  4. Game Theory
  5. Mechanism Design

Learning Outcomes

By the end of the course, students will be able to

  • Represent individual choice behavior using utility functions
  • Apply the duality between utility maximization and expenditure minimization
  • Evaluate efficiency and welfare outcomes using the fundamental theorems of welfare economics
  • Analyze decision-making under uncertainty within the expected utility framework
  • Understand the foundations of general equilibrium and identify conditions for market failure
  • Solve static and dynamic games to predict strategic behavior and equilibrium outcomes

Literature

  • Fudenberg, D, and J. Tirole, Game Theory, The MIT Press 1991
  • Jehle, G. and P.J. Reny, Advanced Microeconomic Theory, Prentice Hall 3rd Edition 2011
  • Kreps, D., A Course in Microeconomic Theory, Princeton University Press 1990
  • MacLeod, W.B., Advanced Microeconomics for Contract, Institutional and Organizational Economics, MIT Press 2022
  • Mas-Colell, A., M. Whinston und J. Green, Microeconomic Theory, Oxford University Press 1995
  • Osborne, M.J., An Introduction to Game Theory, Oxford University Press 2009
  • Salanie, B., The Microeconomics of Market Failures, MIT Press 2000
  • Salanie, B., The Economics of Contracts – A Primer, MIT Press 2nd Edition 2005