Advanced Microeconomics

Building on introductory microeconomics covered in the early Bachelor level, this lecture explores more advanced approaches in microeconomics: How can economic interaction be captured in more complex and more realistic models? How do firms compete in a changing world? How can real economic phenomena such as structural change, financial instability and open-source software be explained? How do macroeconomic patterns and distributions emerge from the micro-level of the economy? The lecture will cover dynamical models from evolutionary economics, economic stastistics, and the theory of complex systems. It will, however, also address advanced equilibrium approaches.

Written examination, 60 minutes. The examination can be written in either English or German. The questions will be available in both English and German.

1. Introduction

2. Equilibrium models

3. Dynamical Systems and their application in microeconomics

4. Empirical distributions of microeconomic quantities

5. Networks and their application in microeconomics

6. Behavioral approaches

Recommended Literature:

Elsner, W., Heinrich, T., and Schwardt, H. (2015). Microeconomics of Complex Economies: Evolutionary, Institutional, Neoclassical, and Complexity Perspectives. Academic Press, Amsterdam, NL, San Diego, CA, et al., Chapters  1, 3, 5, 11, 13.

Supplementary Literature:

Farmer, J. D., Gallegati, M., Hommes, C., Kirman, A., Ormerod, P., Cincotti, S., Sanchez, A., and Helbing, D. (2012). A complex systems approach to constructing better models for managing financial markets and the economy. The European Physical Journal Special Topics, 214(1):295–324.

Farmer, J. D. and Geanakoplos, J. (2009). The virtues and vices of equilibrium and the future of financial economics. Complexity, 14(3):11–38.

Foley, D. K. (1998). Introduction to ’barriers and bounds to rationality’. In Foley, D. K., editor, Barriers and Bounds to Rationality: Essays on Economic Complexity and Dynamics in Interactive Systems, by Albin, P.S., with an Introduction by Foley, D.K., pages 3–72. Princeton University Press, Princeton, N.J.

Gandolfo, G. (1997). Economic dynamics. Springer, Berlin, 1st ed., study ed. edition.

Mas-Colell, A., Whinston, M. D., and Green, J. R. (1995). Microeconomic theory. Oxford University Press, New York, NY u.a.

Nowak, M. A. (2006). Evolutionary dynamics: exploring the equations of life. Belknap Press of Harvard Univ. Press, Cambridge, Mass., Chapter 2.

Vega-Redondo, F. (1996). Evolution, games, and economic behaviour. Oxford University Press, Oxford.