Advanced Microeconomics

Teacher

The teachers are Hubert Jayet and Giuseppe Attanasi from USTL Lille 1 in Lille (FR).

Contact

Giuseppe Attanasi Université Lille 1, Sciences et Technologies
Bât. SH2, Cité scientifique
59655 Villeneuve d’Ascq Cedex
France
giuseppe.attanasi@univ-lille1.fr

Hubert Jayet Université Lille 1, Sciences et Technologies
Bât. SH2, Cité scientifique
59655 Villeneuve d’Ascq Cedex
France
hubert.jayet@univ-lille1.fr

Pre-requisites

Students are supposed to have knowledge of Microeconomic Theories at an intermediate level:

  • Basics of consumer and producer theory: production functions and utility functions, derivation of supply and demand functions.
  • Partial equilibrium analysis
  • Basics of general equilibrium analysis: competitive equilibrium, Pareto-optimality.
  • Basics of imperfect competition: monopoly, Cournot and Bertrand duopoly.

Course contents

A reminder of important microeconomic concepts

  • Substitutability and complementarity
  • Duality Theory and its applications to welfare analysis (analysis of taxation)
  • Returns to scale and their consequences on market structure
  • General equilibrium: Basic concepts, Pareto-optimality and Equilibria and welfare theorems

Imperfect competition

  • Monopolistic competition and the Dixit & Stiglitz model
  • Standard models of oligopolistic competition: Bertrand, Cournot, Entry models.
  • Product characteristics and address models: Hotelling, Salop

Externalities and public goods

  • Definition of externalities and public goods. Rivalry and excludability. Club goods and local public goods.
  • Equilibrium and optimal provision of public goods.
  • The Samuelson rule, the marginal congestion rule.
  • The Pigovian Principle
  • Lindahl allocations and applications to the private provision of club goods.

Asymmetric information

  • Adverse selection
  • Contracting with imperfect information: The Principal-Agent model

Core reading

  • H.L. Varian, Microeconomic Analysis, W.W. Norton, ISBN 0-393-95735-7
  • G.A. Jehle, P.J. Reny, Advanced Microeconomic Theory, Pearson Education, ISBN 978-0-273-73191-7
  • A. Mas-Colell, M.D. Whinston, J.R. Green, Microeconomic Theory, Oxford University Press, ISBN 978-0-195-07340-9
  • D.M. Kreps, A course in Microeconomic Theory, Princeton University Press, ISBN 978-0-691-04264-0

Learning outcomes

Upon successful completion of the course, students should be able:

  • To use the main microeconomic tools that are needed when analyzing international trade, working in international finance or working on economic policy,
  • To carry out welfare analysis of taxation and trade restrictions,
  • To use general equilibrium for analyzing interdependencies between countries,
  • To analyze the asymmetries influencing the impact of economic policies,
  • To analyze the consequences of heterogeneity on the structure of international trade.

Organisation

The Advanced Microeconomics module exists of 12 lectures of 2 hours each, one lecture per week.

The course will be organized with reverse teaching. For each lecture, students have to prepare – in advance and in different groups – presentations on a specific question. The lecture is organized around these presentations, the discussion on the presentations and the comments of the teacher to the presentations.

Assessment

The presentations by the students will be graded and these grades will be combined with the grades of a written examination.