Microeconomics 1

The introductory microeconomics courses rely on hypotheses that guarantee optimal equilibrium. The aim of this microeconomics course is to study the consequences of calling these hypotheses into question. The first part offers an introduction to information asymmetry models, showing on one hand how this asymmetry can lead to sub-optimal market equilibrium, and describing on the other the principles that govern the drafting of optimal contracts in the presence of moral hazard and anti-selection. In the second part, dedicated to the public economy, we return to the private nature of goods and the absence of social consequences of their consumption or production: the equilibrium is thus no longer optimal, leading to market failure. In the third part, we question the axioms on which perfect competition is based and we present the main aspects of the industrial economy.

1. Information asymmetries and introduction to contract theory- The anti-selection problem. An introductory model. Corrective mechanisms. A simple principal-agent model with moral hazard. A simple principal-agent model with anti-selection.
2. Public economy- Collective choices. Public goods. External effects. Non-convexities and natural monopolies.
3. Imperfect competition- Prices and quantities. Choice of products and qualities. Barriers to entry and long-term competition. Vertical control