ECO3001 : Advanced Microeconomics

  • Module Leader(s): Dr Francis Kiraly
  • Owning School: Newcastle University Business School
Semesters
Semester 1 Credit Value: 10
Semester 2 Credit Value: 10
ECTS Credits: 10.0

Aims

Semester 1 aims: To provide an overview of modern microeconomics at an advanced undergraduate level by extending the analysis of perfectly competitive markets, considering the effects of: missing markets and trade frictions, market power, time, uncertainty and strategic interaction.

Semester 2 aims: To introduce students to the study of economic behaviour under asymmetric information and to analyse the welfare implications of asymmetric information on market outcomes.

Outline Of Syllabus

Semester 1 Syllabus:

TOPIC 1: General Equilibrium and Welfare Economics
Exchange and Competitive Equilibrium. Welfare Theorems.

TOPIC 2: Market Power and Missing Markets
Weak and strong monopoly. Externalities

TOPIC 3: Cooperative Game Theory and Social Choice
The core. Equivalence Theorem. Harsanyi welfare function. Shapley value

TOPIC 4: Strategic Interaction.
non-cooperative game theory. Strategic (Nash and subgame - perfect) equilibria in static and dynamic games.

TOPIC 5: Repeated Games and Signalling Games.
The Folk Theorem. Perfect Bayesian equilibria in signalling games.

TOPIC 6. Bargaining
Cooperative (Nash) bargaining. Non-cooperative (Rubinstein) bargaining.

TOPIC 7: Uncertainty and Trade Frictions
Search theory. Market equlibrium with trade frictions.


Semester 2 Syllabus:

TOPIC 1: Search and Matching
Equilibrium price dispersion. Matching.

TOPIC 2: Hidden Information
Adverse selection in labour, goods and insurance markets.

TOPIC 3: Screening
Screening contracts in labour and insurance markets.

TOPIC 4: Signalling
Signalling in labour, goods and financial markets.

TOPIC 5: Hidden Action
Moral hazard in labour and insurance markets. Contract theory

TOPIC 6: Auctions
First-price and second-price auctions.

TOPIC 7: Bargaining
Bargaining with incomplete information.

Teaching Methods

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion164:0064:00N/A
Scheduled Learning And Teaching ActivitiesLecture142:0028:00N/A
Guided Independent StudyDirected research and reading150:0050:00N/A
Scheduled Learning And Teaching ActivitiesSmall group teaching81:008:00N/A
Guided Independent StudyIndependent study150:0050:00N/A
Total200:00
Teaching Rationale And Relationship

1.Lectures provide an in-depth presentation of theoretical models and required techniques, as well as guidance on how to apply the analysis to real-world economic situations.

2.Seminars take students through applications of lecture material and provide solutions to problem sets done in independent study.

3.Independent study involves following up reading list references and practicing analytical skills.

Assessment Methods

The format of resits will be determined by the Board of Examiners

Exams
Description Length Semester When Set Percentage Comment
Written Examination1201A50Unseen
Written Examination1202A50Unseen
Assessment Rationale And Relationship

Exam tests understanding of advanced Microeconomic theories and their application to real market situations.

Reading Lists

Timetable

Disclaimer: The University will use all reasonable endeavours to deliver modules in accordance with the descriptions set out in this catalogue. Every effort has been made to ensure the accuracy of the information, however, the University reserves the right to introduce changes to the information given including the addition, withdrawal or restructuring of modules if it considers such action to be necessary.