Spring semester

Credits
5 ECTS

Teaching method
Classroom instruction, 24 lectures (1st half of the semester)

Examination
2-hour on-site written examination without a PC/completed on paper (closed book)

Assessment
Pass/No pass, no co-examiner

Lecturer
Nicola Maaser

Contents
We develop a coherent set of topics in advanced microeconomics while introducing students to the analytical principles that underpin modern microeconomic research. The course builds on individual choice theory, progressing through monotone comparative statics and choice under risk to general equilibrium analysis and the voluntary provision of public goods. While most of these topics will be familiar from earlier courses, they are treated here at a higher level of rigor and generality, with emphasis on methods used in current research. 

The material provides an excellent opportunity to learn many of the tools and techniques of modern economic theory. Equipped with this knowledge, students will find it easier to review the current literature on applied theoretical and empirical microeconomics. They will be able to approach research questions in areas where microeconomic reasoning is central, such as industrial organization, political economy, labor, finance, and public economics.

Subject areas:

Part I: Consumer Theory

• The Theory of Consumer Choice and Demand
• Duality and Aggregation
• Partial Equilibrium and Welfare Analysis
• General Equilibrium in an Exchange Economy: The Edgeworth Box and the Welfare Theorems
• Public Goods: Neutrality and Comparative Statics of Voluntary Provision

Part II: Monotone Comparative Statics, with Application to Producer Theory 

Part III: Choice under Risk

Part IV: General Equilibrium

Feedback
The following types of feedback are used in this course:

• Facilitated and non-facilitated peer feedback
• Oral activities in class
• Self-assessment
• Feedback on problem set submissions (written or in tutorial sessions)

Description of qualifications
The purpose of this course is to provide students with a solid foundation in advanced microeconomic theory, focusing on individual and social choice, comparative statics, and equilibrium analysis. The course emphasizes analytical tools that form the basis for modern theoretical and applied microeconomic research. Upon completion of the course, the student should be able to demonstrate:

Knowledge and understanding:

• of fundamental concepts and tools in individual choice theory
• of duality methods in consumer and producer theory.
• of monotone comparative statics and their applications.
• of the theory of choice under risk
• of the theoretical foundations of general equilibrium and its welfare properties.
• of the voluntary  provision of public goods, including neutrality and comparative statics results.

Skills:

• to derive and interpret demand, expenditure, and indirect utility functions.
• to apply duality and envelope theorems in economic analysis.
• to use monotone comparative statics to derive qualitative predictions of behaviour.
• to model choice under risk using expected utility theory.
• to formulate and solve partial and general equilibrium models.
• to critically assess the assumptions underlying microeconomic models.

Competences:

• to select and apply appropriate theoretical methods to analyse microeconomic problems.
• to read and evaluate advanced theoretical papers in microeconomics.
• to identify connections between individual optimization and collective outcomes.
• to discuss and communicate how equilibrium concepts apply in markets and strategic settings.
• to employ microeconomic theory as a foundation for research in related fields.

Academic prerequisites
Basic micro and game theory (as acquired, e.g., through 2401: Microeconomics, Game theory part of 2432: Game Theory and International Trade, Mikroøkonomi 1 & 2)

For PhD students at AU (ECON), this course has been pre-approved as an internal BSS PhD course equivalent to 5 ECTS.

Prerequisites for examination participation
The course will feature three problem sets, two of which must be submitted to participate in the exam. Feedback on handed-in problem sets will be provided, and students can earn bonus points for the exam by submitting all three problem sets and giving feedback on others’ (anonymized) solutions.

Literature
Mas-Colell, A., M. D. Whinston, and J.R. Green (1995). Microeconomic Theory. Oxford University Press, Oxford (selected chapters).

Rubinstein, A. (2005). Lecture Notes in Microeconomic Theory. Princeton University Press (freely available).

Plus selected articles (max. 100 pages). 

The total reading is approximately 400 pages.

Schedule spring 2027
TBA

Registration
Registration deadline: February 10^th at noon: Registration form