Please note! Course description is confirmed for two academic years, which means that in general, e.g. Learning outcomes, assessment methods and key content stays unchanged. However, via course syllabus, it is possible to specify or change the course execution in each realization of the course, such as how the contact sessions are organized, assessment methods weighted or materials used.

LEARNING OUTCOMES

This course introduces the students to topics and methods in modern information economics at the graduate level. After taking this course, the students are familiar with the analytical techniques used in microeconomics and have the necessary skills for modeling interactions under incomplete information.

Credits: 5

Schedule: 15.03.2021 - 10.05.2021

Teacher in charge (valid 01.08.2020-31.07.2022): Jan Knoepfle

Teacher in charge (applies in this implementation): Jan Knoepfle

Contact information for the course (valid 22.02.2021-21.12.2112):

Instructor: 

Jan Knoepfle 

email: jan.knoepfle@aalto.fi

office hours: on Zoom by appointment


TA: 

Teemu Pekkarinen

email: teemu.pekkarinen@helsinki.fi 

office hours: by appointment on Zoom


Please feel free to email either of us and make active use of office hours. Teemu will hold scheduled office hours before the problem sets are due (see below) in case there are questions on the exercises

CEFR level (applies in this implementation):

Language of instruction and studies (valid 01.08.2020-31.07.2022):

Teaching language: English

Languages of study attainment: English

CONTENT, ASSESSMENT AND WORKLOAD

Content
  • Valid 01.08.2020-31.07.2022:

    Adverse selection and mechanism design.-Moral hazard and imperfect monitoring.-Dynamic models of incomplete information including signaling and cheap talk.-Selected applications, for example: auctions, bargaining, market microstructure, reputation formation.

  • Applies in this implementation:

    The course consists of three main blocks including the following topics

    1. Adverse Selection and Mechanism Design: Revelation Principle, Incentive Compatibility and Envelope Theorem, Revenue Equivalence, Optimal Auctions, Efficiency and VCG Mechanism  
    2. Moral Hazard and Contracts: Incentive Compatibility and First-order Approach, Risk Sharing, Limited Liability
    3. Sender-Receiver Games: Signaling and Evidence


Assessment Methods and Criteria
  • Valid 01.08.2020-31.07.2022:

    100% Exam

  • Applies in this implementation:

    To pass the course, we require two things:


    1. Solving at least 50% total of the exercises in advance of the sessions. There will be 4 exercise sessions, each with a problem set that will be posted on the course page in advance. Hand in your solutions before each session by e-mail to the TA.


    2. Passing the exam, which will be held shortly after the course. There is one re-take possibility later in the spring.


    The grade for the course is based on the exam only.

Workload
  • Valid 01.08.2020-31.07.2022:

    - Contact Teaching 24h

    - Exercise sessions 8h

    - Exam 2h

    -Independent work 126h

DETAILS

Study Material
  • Applies in this implementation:

    Structure:


    • Lectures will be Mon and Tue 10-12 live on Zoom
    • Some Lecture may be replaced by pre-recorded videos
    • Exercise sessions Mon 14-16 on Zoom. The TA will review that week's problem set
    • In the weeks before problem sets are due, there will be office hours (Ratkomo) where you can ask questions about the exercises. These will be on Zoom 16-17h on Fridays 19.03; 26.03; 09.04 and on Thursday 29.04.



    Material:


    I will upload slides in advance of the lectures. These will be completed with handwritten notes during lectures and uploaded with notes after the lectures.


    Lectures will be based on:

    • Mailath: Modeling Strategic Behavior: A Graduate Introduction to Game Theory and Mechanism Design, World Scientific Publishing. Click here for a free pdf download. 


    Supplementary and more specialised textbooks for different parts are

    • Börgers: An Introduction to the Theory of Mechanism Design, Oxford University Press.
    • Salanié: The Economics of Contracts, MIT Press.
    • Krishna: Auction Theory, Academic Press.
    • Mas-Colell, Whinston, Green: Microeconomic Theory, Oxford University press 



Substitutes for Courses
  • Valid 01.08.2020-31.07.2022:

    Korvaan vanhan kurssin 31L30214

Prerequisites
  • Valid 01.08.2020-31.07.2022:

    Advanced Microeconomics 3

SDG: Sustainable Development Goals

    8 Decent Work and Economic Growth