Course Syllabus
Obiettivi formativi
Il Corso (42 ore di lezione frontale e 6 CFU) si propone di offrire conoscenze specialistiche nelle seguenti aree della microeconomia (di cui si presuppone la conoscena a livello base):
a) teoria e applicazioni della dualità nella sfera del consumo e della produzione;
b) teoria delle scelte in condizioni di incertezza;
c) teoria dei meccanismi d'asta
Contenuti sintetici
Starting from the
assumption that students (are supposed to) have already acquired a sound
background in basic general microeconomics, the first part of this graduate
course intends to provide a comprehensive treatment of duality theory and its
applications in modern microeconomics. Problems of consumer and producer optimization will be analysed in order to derive duality functional relations serving as a theoretical introduction to the methods and results of microeconometric analysis of consumer demand
and production efficiency. The second part of the course will provide a
graduate treatment of individual choice under uncertainty starting from expected utility and including topics such as measures of
risk aversion, risk spreading and risk pooling. The last part of the course deals with the basic issues of auction theory starting from IPV models and the Revenue Equivalence Theorem.
Students should bear in mind that
a) Topics such as games and oligopoly form part of the program of
another microeconomic course (Advanced Microeconomics) delivered during the
second year. In order to avoid useless duplications they are not considered
here.
b) Topics such as moral hazard and adverse selection in the field of insurance will be covered in other courses (in particular Economics of Insurance/Economia delle Assicurazioni).
Programma esteso
Details of the topics covered
Individual consumer behaviour and demand
- Direct and indirect utility functions
- Roy’s identity
- Expenditure function and Slutsky decomposition
- Functional forms and estimations
- Hotelling-Wold identity
- Distance function and its properties
- Relations
between distance and direct utility functions
Producer behaviour and efficiency
- Direct and indirect production functions
- The cost function and Slutsky decomposition
- Profit functions (unrestricted; restricted)
- Functional forms and estimations
- Input and Output Distance Function and their properties
- Measurement and estimation of production efficiency
Uncertainty
- Notion of uncertainty
- Choice under uncertainty and Axioms
- Properties of the utility function, risk premium and measures of risk aversion
- Measure of risk
- Comparative statics under uncertainty
- Production under uncertainty
- Price and technological uncertainty
Auctions
- Basic single unit auction formats
- IPV vs CV
- Bidding models and optimal bids for risk neutral bidders
- Revenue Equivalence
- Risk aversion
- Multiunit auctions
Prerequisiti
Calcolo intermedio (analisi I e algebra I) e microeconomia di base. Lo studente non basi la sua preparazione su testi di matematica per economisti.
Testo undergraduate di riferimento: H. Varian, Intermediate Microeconomics. A modern approach, Norton, ultima edizione
Metodi didattici
Lezioni frontali. Esercizi individuli con correzione in aula. Predisposizione del materiale didattico (testi e files di varia tipologia) nella pagina e-learning del corso. Ricevimento con tutoraggio per piccoli gruppi (due ore settimanali) in presenza se le condizioni lo consentiranno.
All'inizio del corso verrà effettuato un test di ingresso.
Modalità di verifica dell'apprendimento
Esame finale scritto (6 domande a punteggio differenziato, di cui 3 esercizi; ciascuna domanda è
suddivisa in più parti tra loro connesse) se le condizioni sanitarie lo permetteranno. Non è prevista una prova intermedia. Non sono previste modalità particolari per studenti non frequentanti. Modalità soggette alle circostanze sanitarie.
Testi di riferimento
Bibliografia
dualità
H. Gravelle and R. Rees, Microeconomics, Prentice Hall, third edition, 2004 (Chapters 2, 3, 5, 6).
R. Cornes, Duality and modern economics, Cambridge University Press, 1992 (Chapters 2 – 8)
Or equivalent chapters in
graduate textbooks. (Example: R. Sickles and V. Zelenyuk, Measurement of Productivity and Efficiency, C.U.P, 2019)
incertezza
H. Gravelle and R. Rees, Microeconomics, Prentice Hall, third edition, 2004 (Chapters 17 – 19). Or equivalent chapters in graduate textbooks.
Auctions
Lecturer's notes (e learning page)
Basic online material with
exercises will be provided (please visit the E-Learning platform of the course). Language: Italian and English
Periodo di erogazione dell’insegnamento
I semestre
Lingua di insegnamento
Italiano
Learning objectives
This (42h and 6 CFU) course intends to offer specialized training in the following areas of microeconomics (Assuming that basic knowledge has already been acquired by attending students):
a) Duality in consumption and production: theory and applications;
b) Choices under uncertainty;
c) Auctions and applications.
Contents
Starting from the
assumption that students (are supposed to) have already acquired a sound
background in basic general microeconomics, the first part of this graduate
course intends to provide a comprehensive treatment of duality theory and its
applications in modern microeconomics. Problems
of consumer and producer optimization will be analysed in order to
derive duality functional relations serving as a theoretical
introduction to the methods and results of
microeconometric analysis of consumer demand
and production efficiency. The second part of the course will provide a
graduate treatment of individual choice under uncertainty starting from
expected utility and including topics such as measures of
risk aversion, risk spreading and risk pooling. The last part of the
course deals with the basic issues of auction theory starting from IPV models and the Revenue Equivalence Theorem.
Students should bear in mind that
a) Topics such as games and oligopoly form part of the program of another microeconomic course (Advanced Microeconomics) delivered during the second year. In order to avoid useless duplications they are not considered here.
b) Topics such as moral hazard and adverse selection in the field of insurance will be covered in other courses (in particular Economics of Insurance/Economia delle Assicurazioni).
c) Topics such as moral hazard and adverse selection in the field of insurance will be covered in other courses (in particular Economics of Insurance/Economia delle Assicurazioni).
Detailed program
Details of the topics covered
Individual consumer behaviour and demand
- Direct and indirect utility functions
- Roy’s identity
- Expenditure function and Slutsky decomposition
- Functional forms and estimations
- Hotelling-Wold identity
- Distance function and its properties
- Relations
between distance and direct utility functions
Producer behaviour and efficiency
- Direct and indirect production functions
- The cost function and Slutsky decomposition
- Profit functions (unrestricted; restricted)
- Functional forms and estimations
- Input and Output Distance Function and their properties
- Measurement and estimation of production efficiency
Uncertainty
- Notion of uncertainty
- Choice under uncertainty and Axioms
- Properties of the utility function, risk premium and measures of risk aversion
- Measure of risk
- Comparative statics under uncertainty
- Production under uncertainty
- Price and technological uncertainty
Auctions
- Basic single unit auction formats
- IPV vs CV
- Bidding models and optimal bids for risk neutral bidders
- Revenue Equivalence
- Risk aversion
- Multiunit auctions
Prerequisites
Intermediate mathematics including constrained optimization in RN (Calculus I and basic matrix algebra) and basic microeconomics. Students are recommanded to avoid "maths for economists" textbooks.
Undergaduate referencee text: H. R. Varian, Intermediate Microeconomics. A modern approach, Norton, 8th (Eighth) edition.
Teaching methods
Frontal class lectures (if sanitary conditions will allow). Individual execises with class solutions. Two hours of weekly small group tutorials will be organized according to curcumstancies. On line material available (E-Learning course website).
At the beginning of the course an entry test paper will be organized.
Assessment methods
Final written exam (6 questions with 3 exercises; each question includes subquestions) if sanitary conditions are satisfied. No differencs between attending and non-attending students. No mid-term exam.
Textbooks and Reading Materials
Reading List
duality
H. Gravelle and R. Rees, Microeconomics, Prentice Hall, third edition, 2004 (Chapters 2, 3, 5, 6).
R. Cornes, Duality and modern economics, Cambridge University Press, 1992 (Chapters 2 – 8)
Or equivalent chapters in
graduate textbooks. (Example: R. Sickles and V. Zelenyuk, Measurement of Productivity and Efficiency, C.U.P, 2019)
uncertainty
H. Gravelle and R. Rees, Microeconomics, Prentice Hall, third edition, 2004 (Chapters 17 – 19). Or equivalent chapters in graduate textbooks.
auctions
Lecturer's notes (e learning page)
Basic online material with exercises will be provided (please visit the E-Learning platform of the course). Language: Italian and English
Semester
1st semester
Teaching language
Italian
Key information
Staff
-
Bruno Paolo Bosco