Selected Topics in Microeconomics (ECON 6002)

First semester, 2020-2021

Different people bring different points of view to bear on a question. A person who makes all decisions based on his information alone would be making very bad decisions indeed. This is why delegation, expert consultation, committee deliberations, and voting are often used in making decisions at all levels of society. The sharing of information among a group of individuals, however, is plagued by divergent self-interests. It is in the self-interest of an individual to manipulate his evidence—to exaggerate favorable data that supports his preferred outcome, or conceal unfavorable data that works against it. This course explores to what extent communication is possible given the divergence of interests, and analyzes how the learning environment is shaped by the social environment. Examples will be drawn from stock recommendations, messages sent by central bankers, and media influence on politics. A variety of models, including cheap talk games, signaling models, rational herding, strategic voting, collective experimentation and Bayesian learning, are introduced along the way.

This course is intended for Ph.D. students and the more theoretically inclined M.Econ. students who have sufficient background knowledge in mathematics. Those who take this course must be familiar with the calculus, optimization techniques, and probabilistic reasoning.

The reading list is a very important part of this course. Make an effort to read more than what is covered in the lectures.

Sketches of lecture notes are available in this web site, but they are incomplete and some are still under construction. It is very important to attend the lectures.

I have set up a discussion forum in Moodle for registered students to discuss topics related to this course. I will monitor what's being said but will usually not intervene. Participation in this forum may count toward part of class participation. You are encouraged to make use of this forum to ask questions, make comments, or arouse discussion on course-related materials and issues.

Your grade in this course will be based 10% on general class discussions, 45% on a midterm exam, and 45% on a final exam. The final exam will take the form of a take-home paper. I will also ask you to do a presentation in class toward the end of the semester. Further details will follow.

A more long-winded version of the course outline is available here.

October 16, 2020