Università degli studi di Modena e Reggio Emilia

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Teachers

Luigi BRIGHI

Overview

The aim of this course is to complete the student’s microeconomics background with the analysis of choice under uncertainty, the analysis of economic behavior in the presence of strategic interdependence and under conditions of asymmetric information. The emphasis is placed on the development of basic analytical models and their application to simple real-life economic problems. As regards the learning objectives, please refer to the section relating to the expected learning outcomes.
The teaching program was developed assuming face-to-face teaching activities. It could be adapted in case of changes related to the pandemic situation.

Admission requirements

Students are expected to have completed the introductory courses in Microeconomics and Mathematics. Specifically, students are supposed to know consumer theory, the theory of the firm under perfect competion, the equation of a straight line and the techniques of optimization of one variable functions.

Course contents

The theory of choice under uncertainty. Applications to insurance choices, investment choices and risk management principles. (20 hours/2.5 ECTS).
Game theory. Normal form games. Application to oligopoly theory and repeated games Extensive form games, sub-game perfection and strategic moves (20 hours/2.5 ECTS).
Asymmetric information. Hidden information, adverse selection and signaling. Hidden action , moral hazard and incentives. (8 hours/1 ECTS)

A more detailed outline of the course contents along with the lectures notes are available on Moodle’s web page

Teaching methods

The teaching methods consist of lectures and classes. The course is delivered in Italian and attendance is optional. Based on the evolution of the COVID 19 health situation, lessons and classes will be carried out in presence and/or remotely (video recorded).

Assessment methods

Assessment will be based on a 1 hour written examination at the end of the course. The examination paper consists of 2 exercises an 2 questions and is based on the full course contents. The exam is marked on a 30 points scale. Exercise contributes 18 points to the final mark and questions 12 points. Past exam papers are available on Dolly’s course web page. The results will be communicated no later than one week after the written test; the publication will take place through Esse3. Exam tests could be conducted in presence or remotely depending on the evolution of the COVID19 health situation.

Learning outcomes

Knowledge and ability to understand: Through lectures and classes, the student learns the principles of expected utility theory and game theory and reaches the ability to understand basic economic problems of choice under uncertainty, strategic interdependence and asymmetric information.
Ability to apply knowledge and understanding: Through lectures and classes, the student is able to apply the acquired skills to the understanding of simple insurance and investment problems, basic model of oligopoly and simple contractual forms employed to cope with asymmetric information distortions.
Autonomy of judgment: Through the study of the assigned readings the student acquires the ability to select the models to apply for the analysis of microeconomic phenomena and become aware of their restrictions.
Communication ability: The written test allows to develop the ability to present the acquired knowledge in an effective and concise manner; to express the learnt concepts with an appropriate language and to participate in a discussion on the covered topics.
Ability to learn: The described activities allow the student to acquire the methodological tools to continue his education and to upgrade it on his own.

Readings

Bernheim, D., M. Whinston, Microeoconomia, McGraw Hill (2013)
Brighi, L. Microeconomia, Giappichelli, Torino. (1996)
Kreps, D. Microeconomia per manager, Egea, Milano (2005)

Sulla pagina internet di Moodle dedicata al corso sono disponibili il programma dettagliato del corso, le diapositive delle lezioni, i testi delle esercitazioni e un facsimile della prova di esame.
Le diapositive saranno caricate con frequenza settimanale.


Reference texts and teaching materials
Bernheim Whinston, Microeoconomia, McGraw Hill (2013)
L. Brighi, Microeconomia, Giappichelli, Torino. (1996)
D. Kreps, Microeconomia per manager, Egea, Milano (2005)
A detailed outline of the course contents, lectures notes, problem sets and past exam papers are available on Moodle’s course web page.
The slides will be uploaded on a weekly basis.