University of Texas at Dallas School of Management Instructor: Office: Phone: E-mail: Class website: Office Hours: Course Objectives: MECO 6345-Advanced Managerial Economics Fall 2005 Octavian Carare SOM 3.214 (972) 883-4770
[email protected] (best reached by email) www.utdallas.edu/~carare/meco6345.html Tuesday 4 - 6 PM, or by appointment This course is an advanced course in microeconomics. The course will require a good understanding of multivariate constrained optimization techniques and basic statistics. The main objective of the course is to provide students with the concepts and techniques of advanced microeconomics. Required Readings: The required course readings include a textbook and a collection of articles. The main textbook is available from the UTD bookstore and from Off-campus Books. Most of the assigned readings are available electronically from JSTOR (check the class website for links to the articles). Main textbook (Text): Other useful textbooks: Advanced Microeconomic Theory by Geoffrey Jehle and Philip Reny. Microeconomic Theory by Mas-Colell, Whinston and Greene Price Theory and Applications, 5th edition, by Steven Landsburg A Course in Microeconomic Theory by David Kreps The other textbooks are not required, but you may find it useful to take a look at them. A list of required readings follows each section of the course. Course Evaluation: Best of midterm and final Worst of midterm and final Homework Class participation Exams: There will be a midterm and a final examination. The dates of the exams will be announced in class. Both exams will be three hours in length. 1 45% 35% 15% 5% While the final is not comprehensive, it will require understanding of the topics taught in the first part of the course. Exams are closed book and closed notes. No makeup exams will be given. A review session may be scheduled outside of lecture time before the midterm exam if there’s interest for it. Policy on scholastic honesty UT Regents’ regulations regarding scholastic honesty (Regents' Rules and Regulations, Part One, Chapter VI, Section 3, Subsection 3.2) will be strictly enforced. Tentative course outline: Overview and mathematical tools (Text, chapters A1-A2) Consumer theory (Text chapter 1) Other readings: Afriat, S. (1967). The construction of utility functions from expenditure data. International Economic Review 8 pp. 67-77 Becker, G.S. (1962). Irrational Behavior and Economic Theory. Journal of Political Economy 70 pp. 1-13 Diamond, Peter and Daniel McFadden (1974), “Some Uses of the Expenditure Function in Public Finance,” Journal of Public Economics, 3, pp. 3-21. Production (Text chapter 3) Choice under uncertainty (handout) Other readings: Grether, D. and C.H. Plott (1979). Economic Theory of choice and the preference reversal phenomenon. American Economic Review 69 pp. 623-38 Rothschild M. and J. Stiglitz (1970). Increasing risk: a definition. Journal of Economic Theory 2 pp. 225-43\ Rabin, M. and R. Thaler (2000), “Anomalies: Risk Aversion,” Journal of Economic Perspectives. Pure exchange and general equilibrium (Text chapter 5) Other reading Plott, C.H. (1986). Rational choice in experimental markets. Journal of Business 59 pp. 301-27 Partial equilibrium (Text chapter 4) Other readings: Stigler, G.J. (1982). The Economists and the Problem of Monopoly. American Economic Review 72 (2) pp. 1-11. Coase, R. (1972). Durability and monopoly. Journal of Law and Economics 2 Kreps, D.M. and J. Scheinkman (1983) “Quantity precommitment and Bertrand competition yield Cournot outcomes,” RAND Journal of Economics 14 pp. 326-37 Bulow, J., J. Geanakoplos, and P. Klemperer (1985) “Multimarket oligopoly: strategic substitutes and complements,” Journal of Political Economy p. 488. Information economics (Text chapter 8) Other readings: Bernheim, B.D. and M.D. Whinston (1986). Common Agency. Econometrica 54 pp. 923-42 Holmstrom, B. (1979). Moral hazard and observability. Bell Journal of Economics 10 pp. 79-91 Holmstrom, B. (1982). Moral hazard in teams. Bell Journal of Economics 13 pp. 324-40 Shavell, S. (1979) Risk Sharing and Incentives in the Principal and Agent Relationship, Bell Journal of Economics 10, pp. 55-73 Rogerson, W. (1985) The First-order Approach to Principal-Agent Problems, Econometrica 53, pp 1357-1368 Akerloff, G. (1970). The market for lemons: Quality uncertainty and the market mechanism. Quarterly Journal of Economics 89, pp. 488-500. Spence, A.M. (1973). Job market signaling. Quarterly Journal of Economics 87 pp. 355-74 Auctions and mechanism design (Text chapter 9) 3