Microeconomic Theory IV

Readings

• [MWG] = Mas-Colell, Andreu, Michael D. Whinston, and Jerry R. Green. Microeconomic Theory . Oxford University Press, 1995. ISBN: 9780195073409.
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• [Varian] = Varian, Hal R. Microeconomic Analysis, Third Edition . W.W Norton & Company, 1992. ISBN: 9780393957358.
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• Bolton, Patrick, and Mathias Dewatripont. Contract Theory . MIT Press, 2004. ISBN: 978026202576. ↗
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• [Kreps] = Kreps, David M. A Course in Microeconomic Theory . Financial Times Prentice Hall, 1990. ISBN: 9780745007625.
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• [MWG] Chapter 6 C-D, pp. 183–199. (Review)
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• Rothschild, Michael, and Joseph E. Stiglitz. “ Increasing Risk I: A Definition .” Journal of Economic Theory 2, no. 3 (1970): 225–243. ↗
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• Wilson, Robert. “ The Theory of Syndicates .” Econometrica 36, no. 1 (1968):119–132. ↗
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• Kamenica, Emir, and Matthew Gentzkow. “ Bayesian Persuasion .” American Economic Review 101, no. 6 (2011): 2590–2615. ↗
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• [MWG] Chapter 14.
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• [Kreps] Chapter 16.
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• [Varian] Chapter 25.4.
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• Hart, Oliver, and Bengt Holmstrom. “ The Theory of Contracts.” In Advances in Economic Theory: Fifth World Congress . Edited by Truman Fassett Bewley. Cambridge University Press, 1989. ISBN: 9780521389259.
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• Holmstrom, Bengt, and Paul Milgrom. “ Multitask Principal-Agent Analysis .” Journal of Law, Economics and Organization 7 (1991): 24–52. ↗
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• Lazear Edward P., and Sherwin Rosen. “ Rank-Order Tournaments as Optimum Labor Contracts .” Journal of Political Economy 89 (1983): 841–64. ↗
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• [MWG] Chapter 13 D, pp. 460–467.
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• [Kreps] Chapter 17.2, pp. 629–645.
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• [Varian] Chapter 25.6-25.9, pp. 457–469.
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• Stiglitz, Joseph E. and Michael Rothschild. “ Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information .” Quarterly Journal of Economics 90, no. 4 (1976) 629–649. ↗
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• Maskin, Eric, and John Riley. “ Monopoly with Incomplete Information .” The RAND Journal of Economics 15, no 2 (1984): 171–196. ↗
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• [MWG] Chapter 23 A–D, pp. 857–891.
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• [BD] Chapter 7.
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• [Kreps] Chapter 18, pp. 661–713.
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• [Varian] Chapter 23, pp. 414–431.
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• Holmstrom, Bengt. “ Groves’ Scheme on Restricted Domains ." Econometrica 47, no. 5 (1979): 1137–44. ↗
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• Myerson Roger B., and Mark A. Satterthwaite. “ Efficient Mechanisms for Bilateral Trading .” Journal of Economic Theory 29 (1983): 265–81. ↗
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• Myerson, Roger B. “ Optimal Auction Design (PDF) .” Northwestern University Center for Mathematical Studies in Economics and Management Science, Discussion Papers No. 362, 1978. ↗
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• [BD] Chapters 10.3, 11.1, and 12.1–12.3.
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• Hart, Oliver. Firms, Contracts, and Financial Structure . Clarendon Press, 1995. ISBN: 9780198288817. Chapters 1–4.
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• Grossman, Sanford J., and Oliver D. Hart. “ The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration .” Journal of Political Economy 94, no. 4 (1986): 691–719. ↗
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• I will mainly follow the textbook by Mas-Colell, Whinston, and Green (MWG). I also provide supplementary readings from other books, but for the most part MWG will do. Bolton and Dewatripont’s book does provide more in-depth material; it is used in 14.281 Contract Economics , but many will find it useful also for this class. The book by Gollier is an excellent, in-depth treatment of decision making under uncertainty. It may well be worth your investment to buy the book for future reference. I have included in the reading list a few articles, either because they are classic, or because my lectures will make use of them.
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