Topics in Microeconomics (21931)
Choices, thinking in games, communication, price formation, matching and mass media
Degree/study: ADE and Economics Course: third and fourth Term: Third Number of ECTS credits: 5 credits Hours of students dedication: 125 hours Language or languages of instruction: English Professors: Larbi Alaoui / Jose Apesteguia / Jan Eeckhout / Alexander Frug /
Fabrizio Germano / Andreu Mas-Colell / Rosemarie Nagel
1. Presentation of the subject The course aims to cover advanced topics in microeconomics, from individual and interactive decision-making, bounded rationality to strategic communication, mass media and price formation. The lectures will cover theoretical, experimental and empirical material. There is no single reference textbook but rather each instructor will provide a list of articles and other references pertinent to the topics covered. Microeconomics 1 and 2 (20836, 20838), as well as Introduction to Game Theory (22102) are required. Having also taken the courses Information Economics (20854) and Game Theory (21932) is highly recommended. 2. Competences to be attained The student should learn how to think about and model aspects of political economy, communication, media and social interactions more generally. 3. Content
Topic 1 Behavioral Decision Theory (Prof: Jose Apesteguia) Topic 2 Interactive Decisions and Thinking in Games (Profs: Larbi Alaoui and Fabrizio Germano) Topic 3 Price Formation (Profs: Andreu Mas-Colell and Rosemarie Nagel) Topic 4 Strategic Communication and Persuasion (Profs: Alexander Frug and Fabrizio Germano) Topic 5 Matching (Profs: Jan Eeckhout and Rosemarie Nagel) Topic 6 Media Economics (Prof: Fabrizio Germano)
4. Course Evaluation There will be three problem sets posted on aula global that are to be handed in one or two weeks later as well as one short seminar presentation that can be done in group and for which a short handout (about 4 pages long) has to be handed is; the presentation is mandatory and will be in weeks 9 and 10 of the quarter in the seminars. Grades are based on the final exam (50%), the class presentation (30%), the problem sets (10%), and participation in experiments, class and seminars (10%). A passing grade on the final exam is required to pass the class. There will be no midterm. 5. Tentative Schedule
Week Theory: ThFr 18:00-19:30 Seminars: We 9:00-10:30 1. 11/4-15/4 Apesteguia (Th/Fr) Behavioral Decisions 2. 18/4-22/4 Apesteguia (Th/Fr) Behavioral Decisions 3. 25/4-29/4 Germano (Th/Fr) Interactive Decisions 4. 2/5-6/5 Alaoui (Th) Thinking in Games
Germano (Fr) Interactive Decisions
5. 9/5-13/5 Germano (Th) Interactive Decisions Mas-Colell (Fr) Price Formation
6. 16/5-16/5 Nagel (Th) Price Formation Germano (Fr) Strat. Communication
7. 23/5-27/5 Germano (Th/Fr) Strat. Communication Germano 8. 30/5-3/6 Eeckhout (Th) Matching
Frug (Fr) Bayesian Persuasion Nagel (required)
9. 6/6-10/6 Frug (Th) Bayesian Persuasion Germano (Fr) Media Economics
10. 13/6-17/6 Germano (Th/Fr) Media Economcs Germano (required) Note: In Weeks 5 and 8 there will be an experiment in the seminar classes and participation is required. In Weeks 9 and 10 there will be presentations in the seminar classes and participation in these seminars is mandatory; a list of papers for presentation will be posted early in the quarter; a detailed schedule will be announced. The papers presented in the seminars will be exam relevant. 6. References
Topic 1 Behavioral Decision Theory
Classic theory review -- Kreps (1988) Notes on the Theory of Choice, Underground Classics in Economics. Experimental evidence -- Thaler (2015) Misbehaving: The Making of Behavioral Economics, Norton. Bounded rationality -- Manzini, Mariotti (2007) Sequentially Rationalizable Choice, Amer Econ Rev, 97,1824-1839. -- Masatlioglu, Nakajima, Ozbay (2012) Revealed Attention, Amer Econ Rev, 102, 2183-2205. -- Bernheim, Rangel (2009) Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics Quart J Econ, 124, 51-104.
Reference-dependence behavior -- Kahneman, Tversky (1979) Prospect Theory: An Analysis of Decision Under Risk, Econometrica, 47, 263-291. -- Kszegi, Rabin (2006) A Model of Reference-Dependent Risk Attitudes, Amer Econ Rev, 97, 1047-1073. Topic 2 Interactive Decisions and Thinking in Games Interactive decisions and higher order beliefs -- Rubinstein (1989) The Electronic Mail Game: Strategic Behavior under 'Almost Common Knowledge'," Amer Econ Rev, 79, 385-91. -- Samuelson (2004) Modeling Knowledge in Economic Analysis, J Econ Lit, 42(2), 367-403. Thinking in games -- Camerer (2003) Behavioral Game Theory, Princeton University Press.
Topic 3 Price Formation
Topic 4 Strategic Communication and Bayesian Persuasion
Cheap talk: -- Blume, Board, Kawamura (2007) Noisy Talk, Theor Econ, 2, 395-440. -- Chakraborty, Harbaugh (2007) Comparative Cheap Talk, J Econ Theory, 132, 70-94. -- Chen, Kartik, Sobel (2008) Selecting Cheap-Talk Equilibria, Econometrica, 76, 375-393. -- Crawford, Sobel (1982) Strategic Information Transmission, Econometrica, 50, 1431-1451. -- Sobel (2013) Giving and Receiving Advice, in Advances in Economics and Econometrics: Theory and Applications, Tenth World Congress, Acemoglu, Arellano, Dekel (eds.), Cambridge University Press Experts and Persuasion: -- Gentzkow, Kamenica (2015) Competition in Persuasion, Mimeo. -- Goltsman, Hrner, Pavlov, Squintani (2009) Mediation, Arbitration and Negotiation, J Econ Theory, 144(4), 1397-1420. -- Kamenica, Gentzkow (2011) Bayesian Persuasion, Amer Econ Rev, 101, 2590-2615. -- Krishna, Morgan (2001) A Model of Expertise, Quart J Econ, 117, 747-775. -- Krishna, Morgan (2004) The Art of Conversation: Eliciting Information from Experts through Multi-Stage Communication, J Econ Theory, 117: 147-179 -- Milgrom (1981) Good News and Bad News, Bell J Econ, 21, 380-391.
Topic 5 Matching
Topic 6 Media Economics
-- Alaoui, Germano (2015) Time Scarcity and the Market for News, Mimeo, UPF. -- Besley, Prat (2006) Handcuffs for the Grabbing Hand? Media Capture and Government Accountability, Amer Econ Rev, 96: 720-736. -- Gentzkow, Shapiro (2008) Competition and Truth in the Market for News, J Econ Perspectives, 22, 133-154.
-- Gentzkow, Shapiro (2010) What Drives Media Slant? Evidence from U.S. Daily Newspapers, Econometrica, 78, 35-71. -- Germano, Meier (2013) Concentration and Self-Censorship in Commercial Media, J Pub Econ, 97, 117-130. -- Mullainathan, Shleifer (2005) The Market for News, Amer Econ Rev, 95,1031-1053. -- Prat, Strmberg (2013) The Political Economy of Mass Media, in Advances in Economics and Econometrics: Theory and Applications, Tenth World Congress, Acemoglu, Arellano, Dekel (eds.), Cambridge University Press.