Microeconomics (MSc Economics)
News
- There is no exercise session in the first week of the semester (October 14).
- I do not use ILIAS because I prefer openly accessible material and dislike parts of the terms of service. All material for this course is available on this website.
- calculator policy: calculators are neither needed nor allowed in the exam
- exam dates: Feb 12, 2027, 14:30 (101/EG/7) and March 16, 2027, 10:00 (Aula 1); registration via KLIPS
Course setup
Lecture: Thursdays, 14:00-15:30 (136/01/1.01 HS XXX)
Exercise class: Wednesdays, 14:00-15:30 (136/01/1.01 HS XXX)
Prerequisites: see schedule
Material
Slides and math notes are on sciebo and maybe updated if necessary over the course of the term.
- lecture notes including exercises (password announced in lecture only)
- links to material created by other people (optional)
- video on Arrow's theorem
- Friedman's pencil video (based on (Read (1958)))
Textbooks
The provided lecture notes cover all topics. An alternative textbook is (Jehle and Reny (2011)). On auctions, Paul Klemperer's book (Klemperer (2004)) is an interesting (optional!) read but goes beyond the material covered in this course.
Study recommendations
Check before each lecture the required prerequisites in the schedule below. If you are shaky on the required math, check the relevant parts in the math notes (on sciebo).
Read the relevant part of the lecture notes after each lecture (some students prefer to read before the lecture which is fine with me as well). Read through the exercises before coming to the exercise class and try to solve them (spend 15 minutes or more per exercise). The goal is not so much to obtain the solution on your own but to figure out what you did and what you did not understand in the lecture (and what you misunderstood…).
Some past students have benefited from making a 1-2 page summary for each lecture (possibly also covering the exercise class). These summaries can speed up your final exam preparation.
Schedule
The following schedule is subject to changes. Exercise numbers refer to the exercises at the end of each lecture note chapter. You should have a look at the exercises before coming to the exercise session.
| Week | Topic | Exercises | Prerequisites |
|---|---|---|---|
| 1 | preference aggregation | 1,2,4 | preferences (completeness, transitivity) |
| 2 | markets, prices, equilibrium | 1,2,3 | consumer problem, marginal rate of substitution, constrained optimization, compact sets, demand |
| 3 | decision making under uncertainty | 2,3,4 | discrete probability distribution, expected value, concavity and convexity of functions, closed sets |
| 4 | Bayesian games I | 1,2,4 | probability distribution, expected value, normal form games, game trees, Nash equilibrium |
| 5 | Bayesian games II | 3,5,7 | |
| 6 | auctions I (IPV) | 5 | inverse functions, continuous probability distributions and their expectation |
| 7 | auctions II (RET) | 1,4,7 | integration by parts |
| 8 | auctions III (design) | 3,2,6 | |
| 9 | internet ad auctions | 8,9,10 | |
| 10 | adverse selection | 1,3,4 | supply and demand |
| 11 | PBE | 6,7 | game trees, subgame perfect Nash equilibrium |
| 12 | signaling I | 1,2,3 | |
| 13 | signaling II | 4,5,6 | |
| 14 | Q&A |
On Prerequisites: If you are not familiar with one of the topics mentioned as prerequisite, please check the math notes on sciebo before coming to the lecture (wikipedia and your favorite LLM might also be useful). If you favor a slower but more thorough approach, consult (Gibbons (1992)) or (Tadelis (2013)) for game theory, (Varian and Melitz (2024)) for microeconomics, (Sydsæter et al. (2022)) for mathematics and (Ross (2020)) for probability theory.