Microeconomics II

This course is devoted to decision making under uncertainty and the economics of asymmetric information. The first topic introduces the Von-Neumann-Morgenstern decision model which is used in many areas of modern economics where risk plays a role (macroeconomics, finance, etc.). The course studies the foundations of this model and alternative approaches. The second part focuses on economic settings with asymmetric information. With the help of game theoretic tools, we study the working of markets with asymmetric information, bilateral trading problems with moral hazard and adverse selection, and the theory of mechanism design. The intention of the course is to familiarize students with the standard tools of modern economic theory and to train them in applying these tools to actual economic problems.