Topics in Microeconomics (21931) 
                                         
               Choices, thinking in games, communication, 
                price formation, matching and mass media 
             
             
            Degree/study: ADE and Economics 
            Course: third and fourth 
            Term: Third 
            Number of ECTS credits: 5 credits  
            Hours of student’s dedication: 125 hours 
            Language or languages of instruction: English 
            Professors: Larbi Alaoui / Jose Apesteguia / Jan Eeckhout / Alexander Frug / 
               Fabrizio Germano / Andreu Mas-Colell / Rosemarie Nagel  
             
            1. Presentation of the subject 
             
            The course aims to cover advanced topics in microeconomics, from individual and 
            interactive decision-making, bounded rationality to strategic communication, mass 
            media and price formation. The lectures will cover theoretical, experimental and 
            empirical material. There is no single reference textbook but rather each instructor 
            will provide a list of articles and other references pertinent to the topics covered. 
            Microeconomics 1 and 2 (20836, 20838), as well as Introduction to Game Theory 
            (22102) are required.  Having also taken the courses Information Economics (20854) 
            and Game Theory (21932) is highly recommended. 
             
            2. Competences to be attained 
             
            The student should learn how to think about and model aspects of political economy, 
            communication, media and social interactions more generally.  
             
            3. Content 
                                         
            Topic 1 Behavioral Decision Theory (Prof: Jose Apesteguia) 
             
            Topic 2 Interactive Decisions and Thinking in Games (Profs: Larbi Alaoui and 
            Fabrizio Germano) 
             
            Topic 3 Price Formation (Profs: Andreu Mas-Colell and Rosemarie Nagel) 
              
            Topic 4 Strategic Communication and Persuasion (Profs: Alexander Frug and 
            Fabrizio Germano) 
             
            Topic 5 Matching (Profs: Jan Eeckhout and Rosemarie Nagel) 
             
            Topic 6 Media Economics (Prof: Fabrizio Germano) 
             
                   4. Course Evaluation 
                    
                   There will be three problem sets posted on aula global that are to be handed in one 
                   or two weeks later as well as one short seminar presentation that can be done in 
                   group and for which a short handout (about 4 pages long) has to be handed is; the 
                   presentation is mandatory and will be in weeks 9 and 10 of the quarter in the 
                   seminars. Grades are based on the final exam (50%), the class presentation (30%), 
                   the problem sets (10%), and participation in experiments, class and seminars (10%). 
                   A passing grade on the final exam is required to pass the class. There will be no 
                   midterm. 
                    
                    
                   5. Tentative Schedule 
                    
                №  Week                Theory: ThFr 18:00-19:30                 Seminars: We 9:00-10:30  
                1.    11/4-15/4        Apesteguia (Th/Fr) Behavioral Decisions   
                2.    18/4-22/4        Apesteguia (Th/Fr) Behavioral Decisions   
                3.    25/4-29/4        Germano (Th/Fr) Interactive Decisions     
                4.    2/5-6/5          Alaoui (Th) Thinking in Games             
                                       Germano (Fr) Interactive Decisions 
                5.    9/5-13/5         Germano (Th) Interactive Decisions       Nagel (required) 
                                       Mas-Colell (Fr) Price Formation 
                6.    16/5-16/5        Nagel (Th) Price Formation               Germano  
                                       Germano (Fr) Strat. Communication 
                7.    23/5-27/5        Germano (Th/Fr) Strat. Communication     Germano 
                8.    30/5-3/6         Eeckhout (Th) Matching                   Nagel (required) 
                                       Frug (Fr) Bayesian Persuasion 
                9.    6/6-10/6         Frug (Th) Bayesian Persuasion            Germano (required) 
                                       Germano (Fr) Media Economics 
                10.   13/6-17/6        Germano (Th/Fr) Media Economcs           Germano (required) 
                    
                   Note: In Weeks 5 and 8 there will be an experiment in the seminar classes and 
                   participation is required. In Weeks 9 and 10 there will be presentations in the 
                   seminar classes and participation in these seminars is mandatory; a list of papers for 
                   presentation will be posted early in the quarter; a detailed schedule will be 
                   announced. The papers presented in the seminars will be exam relevant. 
                    
                   6. References 
                   Topic 1 Behavioral Decision Theory 
                   Classic theory review 
                   -- Kreps (1988) Notes on the Theory of Choice, Underground Classics in Economics. 
                    
                   Experimental evidence 
                   -- Thaler (2015) Misbehaving: The Making of Behavioral Economics, Norton. 
                    
                   Bounded rationality 
                   -- Manzini, Mariotti (2007) Sequentially Rationalizable Choice, Amer Econ Rev, 
                   97,1824-1839. 
                   -- Masatlioglu, Nakajima, Ozbay (2012) Revealed  Attention, Amer Econ Rev, 102, 
                   2183-2205. 
                   -- Bernheim, Rangel (2009) Beyond Revealed Preference: Choice-Theoretic 
                   Foundations for Behavioral Welfare Economics” Quart J Econ, 124, 51-104. 
          
         Reference-dependence behavior 
         -- Kahneman, Tversky (1979) Prospect Theory: An Analysis of Decision Under Risk, 
         Econometrica, 47, 263-291.  
         -- Köszegi, Rabin (2006) A Model of Reference-Dependent
Risk Attitudes, Amer 
         Econ Rev, 97, 1047-1073.  
          
         Topic 2 Interactive Decisions and Thinking in Games 
          
         Interactive decisions and higher order beliefs 
         -- Rubinstein (1989) The Electronic Mail Game: Strategic Behavior under 'Almost 
         Common Knowledge'," Amer Econ Rev, 79, 385-91. 
         -- Samuelson (2004) Modeling Knowledge in Economic Analysis, J Econ Lit, 42(2), 
         367-403. 
          
         Thinking in games 
         -- Camerer (2003) Behavioral Game Theory, Princeton University Press.  
         Topic 3 Price Formation 
         Topic 4 Strategic Communication and Bayesian Persuasion 
         Cheap talk: 
         -- Blume, Board, Kawamura (2007) Noisy Talk, Theor Econ, 2, 395-440. 
         -- Chakraborty, Harbaugh (2007) Comparative Cheap Talk, J Econ Theory, 132, 70-
         94. 
         -- Chen, Kartik, Sobel (2008) Selecting Cheap-Talk Equilibria, Econometrica, 76, 
         375-393. 
         -- Crawford, Sobel (1982) Strategic Information Transmission, Econometrica, 50, 
         1431-1451. 
         -- Sobel (2013) Giving and Receiving Advice, in Advances in Economics and 
         Econometrics: Theory and Applications, Tenth World Congress, Acemoglu, Arellano, 
         Dekel (eds.), Cambridge University Press 
          
         Experts and Persuasion: 
         -- Gentzkow, Kamenica (2015) Competition in Persuasion, Mimeo. 
         -- Goltsman, Hörner, Pavlov, Squintani (2009) Mediation, Arbitration and Negotiation, 
         J Econ Theory, 144(4), 1397-1420. 
         -- Kamenica, Gentzkow (2011) Bayesian Persuasion, Amer Econ Rev, 101, 2590-
         2615. 
         -- Krishna, Morgan (2001) A Model of Expertise, Quart J Econ, 117, 747-775. 
         -- Krishna, Morgan (2004) The Art of Conversation: Eliciting Information from Experts 
         through Multi-Stage Communication, J Econ Theory, 117: 147-179 
         -- Milgrom (1981) Good News and Bad News, Bell J Econ, 21, 380-391. 
         Topic 5 Matching 
         Topic 6 Media Economics 
         -- Alaoui, Germano (2015) Time Scarcity and the Market for News, Mimeo, UPF. 
         -- Besley, Prat (2006) Handcuffs for the Grabbing Hand? Media Capture and 
         Government Accountability, Amer Econ Rev, 96: 720-736. 
         -- Gentzkow, Shapiro (2008) Competition and Truth in the Market for News, J Econ 
         Perspectives, 22, 133-154. 
         -- Gentzkow, Shapiro (2010) What Drives Media Slant? Evidence from U.S. Daily 
         Newspapers, Econometrica, 78, 35-71. 
         -- Germano, Meier (2013) Concentration and Self-Censorship in Commercial Media, 
         J Pub Econ, 97, 117-130. 
         -- Mullainathan, Shleifer (2005) The Market for News, Amer Econ Rev, 95,1031-
         1053. 
         -- Prat, Strömberg (2013) The Political Economy of Mass Media, in Advances in 
         Economics and Econometrics: Theory and Applications, Tenth World Congress, 
         Acemoglu, Arellano, Dekel (eds.), Cambridge University Press.