This course rigorously advances the understanding of the modern microeconomic approach to decision making over the foundations provided in prerequisite bachelor courses. Topics included besides the standard treatment of households and firms are equilibrium analysis, uncertainty & ambiguity, social choice, game theory, as well as information economics.  All theoretical models and constructs are motivated using real-world examples of managerial practice.Course goal: ◮ The key concepts of (applied) microeconomic theory.◮ The classic results of general equilibrium theory.◮ The basic skills required to work on new problems in this field.

The course introduces the basis for applied work at the intersection of computer science, economics, and business. Course participants will be encouraged to explore and present own research problems at the end of the course which will ideally evolve into the development of novel questions in the field (and related areas). 

Utility & uncertaintyUtility Expected utilityBehavioral examplesConsumer theoryUtility maximization & Walrasian (Marshallian) demandExpenditure minimization & Hicksian demandSlutsky equationProducer theoryCost minimization & conditional input demandProfit maximization & unconditional input demandCompetitive firm & Partial equilibriumCompetition & general equilibriumExchange economy & Edgeworth box: Pareto efficiency & Contract curveWalrasian (competitive) equilibrium & Walras’ lawExcess demand & equilibrium existence: First & Second Welfare theoremsSocial choice & welfareVoting: Majority rule, Condorcet’s paradox, & Median Voter theoremSocial welfare function & Arrow’s impossibility theoremSocial choice function & Gibbard-Satterthwaite theorem

The content of the CBK1 & CBK2 modules is a strict prerequisite. 

The successful completion of the CBK1 & CBK2 modules is a strict prerequisite.

Textbooks (required reading)Jehle,G. & P. Reny (2011) Advanced Microeconomic Theory,Pearson, 3rd ed.Mas-Collel, A., M. Whinston, & J. Green (1995) Microeconomic Theory, OUP.

There will be a two-hour, closed-book final exam, tentatively scheduled one week after the last lecture of this course. This final exam is worth 70% of your grade. There will be some choice on the final exam: In total, you’ll have to answer three questions from a choice of four.The problem sets are worth 30%. Hence, to get a good final grade, you need to perform well on both exam and problem sets.

For the exam you will need to know the full content of the notes and problem sets.

Final written exam 70%Problem sets / report 30%