Economics of Informaction

In this site you will find information about the course, as well as material and references that are useful to prepare it.

INSTRUCTOR: Diego Moreno
Class Schedule: Tuesdays 16:00-17:30, room 7.1.6
Office Hours: Tuesdays, 14:00-16:00, office 15.2.45.

TA: Rubén Veiga
Class Schedule: Fridays 16:00-17:30, room 7.1.2bis
Office Hours: Thursdays, 15:00-17:00, office 15.2.02.

OBJETIVES
The course provides an introduction to the ideas and methods of contract theory, and develops applications to public and industrial economics, business organization, etc.

PRERREQUISITES
Familiarity with calculus, basic probability theory, game theory and microeconomics.

TEXTBOOKS
I. Macho, D. Perez-Castrillo: An Introduction to the Economics of Information, Oxford UP, 2001.
V. Krishna, Auction Theory, Academic Press, 2010.

    OTHER REFERENCES
    P. Bolton and M. Dewatripont: Contract Theory, MIT Press, 2005.
    R. Gibbons: A premier in Game Theory, Prentice Hall, 1992.
    J. E. Harrington: Games, Strategies, and decision making, Worth Publishers, 2009.
    J.-J. Laffont and D. Martimort: The Theory of Incentives, Princeton UP, 2002.
    M. J. Osborne: An introduction to Game Theory, Oxford UP, 2003.
    B. Salanie: The Economics of Contracts: A Primer, MIT Press, 2005.

PROGRAM
1. Risk Distribution: the Principal-Agent Problem (Macho and Perez-Castrillo, chapter 2).
2. Moral Hazard (Macho and Perez-Castrillo, chapter 3).
3. Adverse Selection: Screening, Signaling (Macho and Perez-Castrillo, chapters 4 and 5).
4. Mechanism Design: Auctions (Krishna, chapters 2 and 3).

GRADING
The final grade will be based on class participation and homework assignment (10%), a midterm exam (40%), and a comprehensive final exam (50%). The course grade of the students who take the extraordinary exam will be that of the exam if it is larger than this weighted average.

    EXAM DATES
    Midterm: March 24, 16:00-18:30.
    Final (ordinary exam): Thursday, June 1, 9:00-12:00, room 10.2.1.
    Final (extraordinary exam): Tuesday, June 20, 15:00-18:00, room 10.2.6.