B2201 - MODELING INDIVIDUAL BEHAVIOUR

Learning outcomes

At the end of the class, the student has a working knowledge of the basic tools and results of the classical microeconomic theory for perfectly competitive environments. In particular, the class focuses on: - Consumer choice: utility maximization, expenditure minimization and the revealed preference approach. - Choice under uncertainty and insurance decisions. - Firm choice: profit maximization and cost minimization. Finally, the student is able to apply these theoretical tools to econometric analyses.

Course contents

ORGANIZATION OF LECTURES:

The course is organized with all lectures taught in presence. Exams are in presence too.

COURSE CONTENT:

PART I: Consumer behavior
1. Utility maximization
2. Expenditure minimization
3. Duality and comparative statics
4. Decisions under uncertainty: Expected utility theory

PART II: Firm behavior 
5. Technology and production function
6. Profit maximization
7. Cost minimization
8. Cost functions, duality

Readings/Bibliography

The main textbook is Jehle G.A. and P. Reny: "Advanced Microeconomic Theory, Prentice Hall, 2010.

Further readings:

• D.M. Kreps: "A Course in Microeconomic Theory", Prentice Hall, 1990
• A. Mas-Colell, M.D. Whinston, J.R. Green:"Microeconomic Theory", Oxford University Press, 1995 (more advanced)
• H. R. Varian: "Microeconomic Analysis", third Edition 1992, W.W. Northon & Co. Inc.

Slides and digital boards etc. can be found on Virtuale

Teaching methods

Lectures and tutorials.

As for mathematical prerequisites, a good knowlwdge of the following topics is needed:

• linear algebra
• functions of many variables
• differential calculus
• optimization subject to constraints

Students who lack such prerequisites are invited to catch up as soon as possible by attending the crash-course in Mathematics and by studying the mathematical appendices of the above-listed texts.

Assessment methods

The final assessment consists in a written examination with analytical exercises and theoretical questions. Analytical exercises are worth 2/3 of the exam while theoretical questions are worth 1/3.

No oral examinations are admitted.

Teaching tools

Theory will be complemented by tutorials to be added to the ordinary time schedule.

Office hours

See the website of Nadia Burani