Advanced microeconomics II

1. This course is given for the advanced master as well as PhD students at WSE
2. I teach one half, the other half is taught by Łukasz Woźny
3. Focus: basic tools in formal microeconomics

February 26: Minimax regret strategies in simple games. Readings:

• Goeree, J. K., & Holt, C. A., 2001, Ten Little Treasures of Game Theory and Ten Intuitive Contradictions, AER
• Lewandowski, M. 2020, Minimax regret and deviations form Nash Equilibrium, See the Research tab to get the supplementary Excel file,
• Game of Rows application webpage

March 4:  Introduction to auction theory: first price, second price auction, English, Dutch auction, SIPV model, revenue equivalence, optimal auction, monopoly price or auctions, Reading:

• Wolfstetter, E. (1996). Auctions: an introduction. Journal of economic surveys, 10(4), 367-420.
• Problem set 1, due date March 25

March 11: Cancelled

April 8:

April 22:

April 29:

Lecture in the past years:

• Feb 26: Reading: [1] chapter 2, [2] chapter 1 and 4, slides: revealed preference, preference relation, choice functions
• Mar 6: Ordinal utility and Cantor (1915) theorem
  Reading: [1] chapter 3, [2] chapter 2
• Mar 13: Expected Utility hypothesis and theorem, basic stochastic orders
  Reading: [3] chapter 1 and chapter 4, [4] chapter 6 sections B,D, [1] chapter 5, slides: EU simple 1, EU simple 2, Bernoulli lottery simulation Excel
• Mar 20: Risk aversion under Expected Utility, Pratts’ theorem of comparative risk aversion.
  Reading: [3] chapter 4, [4] chapter 6 sections C, [1] chapter 6, further reading: LINK
• Mar 27: Applications of Expected Utility: insurance, portfolio choice, riskiness measures based on Expected Utility
  Reading: EUapplications, Sergiu Hart presentation and paper
• Apr 3: Subjective probability, No Dutch book theorem, de Finetti (1937) theorem
  Reading: [5] Chapter 10, Hajek, Dutch book arguments
• May 15:  Solutions to the problem set. Discounted utility theory
  Reading: [6] chapter 18
• May 22: Discounted utility theory, psychology of intertemporal choice
  Reading: [6] chapters 18, 19, 20
• Problem set due date April 17

Literature
[1] Kreps D., Notes on the Theory of Choice
[2] Gilboa I., Lecture notes for introduction to decision theory
[3] Lewandowski M., Decision theory – lecture notes
[4] Mas-Collel, Whinston, Green, Microeconomic theory
[5] Gilboa I., Theory of decisions under uncertainty
[6] Noor J., Lecture Notes on Economic Theory and Psychology