Economics: Advanced Microeconomic Analysis

<p>In this course, you will learn how individuals and firms make economic decisions under certainty and uncertainty, how they interact strategically and how incentives and information shape outcomes in markets.</p><p>You start by looking at individual decision making, with applications ranging from isolated choices by consumers to policy evaluation of price changes (for instance due to tax changes). Using the theory of economic decision-making under risk and uncertainty, you apply consumer choice to key areas of the economy such as finance and insurance. </p><p>You move on to the closely related theory of production and develop it to the point of monopoly when there are increasing returns and significant fixed costs. You then use the monopoly framework to study common pricing strategies (price discrimination), such as charging different prices to different groups of consumers and offering product bundles to let consumers choose what suits them best. </p><p>You study strategic interaction between individuals and firms by introducing game theory. This includes situations where choices are made simultaneously or in sequence, and cases where information is incomplete. Examples include competition between firms and behaviour in markets with incomplete information. </p><p>Finally, you examine incentive problems that arise when actors hold asymmetric information, such as adverse selection and moral hazard. Examples include insurance markets and incentives within organisations.</p>