Advanced Microeconomics
This course builds on and deepens the basic understanding of core microeconomic theory that usually is conveyed in most bachelor courses on microeconomics.
Chapter 1: Consumer Theory
- A Model of Consumer Choice
- Preferences
- Utility Function
- Utility Maximization
- Empirical Challenges to the Standard Model
Chapter 2: Expected Utility Theory
- A Model of Choice under Risk
- Preferences
- Expected Utility Theorem
- Risk Attitude
- First- and Second-Order Stochastic Dominance
- Empirical Challenges to the Standard Model
Prerequisites
Usually, we will work with precise mathematical formalizations of the ideas that we want to think and talk about. In consequence, a solid understanding of the mathematical toolbox of standard microeconomics (e.g., differential calculus and constrained optimization; basic set theory; integration by parts) will be helpful as it will allow to focus on the underlying economics and not to get lost in the formal derivations. But don’t worry – every mathematical concept we need will be introduced and explained along the way such that everyone should have a fair chance to follow. More important than having a solid mathematical background is having a strong interest in and (even better) fun with formal economic analysis.
Literature
The following list compiles the primary references that the lecture draws upon. These readings are not meant to be mandatory – the lecture slides should be sufficiently detailed to guide you through the material that we are going to cover – but rather as voluntary for those who are interested in gaining additional related insights that go beyond the scope of this lecture. Several secondary references are provided in the lecture slides.
Chapter 1: Consumer Theory
- Chapter 1 in G. A. Jehle and P. J. Reny (2001): "Advanced Microeconomic Theory"
Chapter 2: Expected Utility Theory
- Chapter 6 in A. Mas-Colell, M. D. Whinston, and J. Green (1995): "Microeconomic Theory"
