Advanced Microeconomics

Module code: EC3000

Any economic decision involves a part of uncertainty.  Governments make policy decisions in a world where economic or sanitary crises are almost impossible to foresee.  Financial actors and insurers are essentially dealing with risks.  Employers cannot monitor the activity of their employees at no cost.  Banks and shareholders have no control over the choices of entrepreneurs and chief executive officers.  Choosing where to live, which flat to rent, which car to buy, which professional career to undertake, all these decisions are made with a certain degree of uncertainty, even small.

This module explores decision-making and economic outcomes in the presence of uncertainty, using modelling tools from modern economic theory.  The first part introduces you to decision-making when risks are taken into account. You will become familiar to risk-mitigating strategies and how well-functioning financial and insurance markets can help.  The second part of the module introduces you to problems of asymmetric information, such as moral hazard and adverse selection.  You will explore these problems using standard theoretical frameworks.