Microeconomics of Contemporary Challenges

Course goals

Learning objectives
At the end of the course the student is able to:

• Understand and explain the core concepts and models of microeconomic theory.
• Apply microeconomic frameworks to analyse individual decision making, market interaction, and equilibrium outcomes.
• Use formal economic reasoning to assess market imperfections, strategic behaviour, and institutional arrangements.
• Apply more advanced microeconomic-theoretic concepts such as mechanism design, networked markets, or matching markets to analyse the economic implications of contemporary developments and societal challenges.
• Critically evaluate economic arguments and policy proposals related to market design and economic change using a coherent theoretical framework.

Content

This course provides a solid foundation in microeconomic theory and develops students’ ability to apply it to contemporary economic issues. Combining analytical rigour with practical relevance, it equips students to analyse how markets function and how economic outcomes are shaped. The course is guided by two overarching questions: how do economic and societal developments affect market outcomes, and how can economic principles be used to design institutions and policies that improve those outcomes?

To address these questions, the course revisits and deepens the core building blocks of microeconomic theory. We begin with models of individual decision making, including preferences, choice, and decisions under uncertainty. These foundations are applied to consumer behaviour and production decisions, allowing for and the assessment of different institutional arrangements, and for the analysis of market power and monopoly.

A central part of the course is the concept of equilibrium. We study equilibrium in a range of economic environments, from stylised settings to exchange economies with production, and consider the roles of expectations and asymmetric information. The course also introduces strategic interaction through a focused treatment of key game-theoretic equilibrium concepts.

Building on this framework, the course explores selected advanced topics such as mechanism design, matching markets, or networked markets, extending the analysis to more complex economic settings. Together, these tools provide students with a coherent and flexible analytical toolkit for evaluating economic outcomes and institutional design.

Format
The course consists of 1 lecture and 1 tutorial per week (1h45m each). Lectures will focus on explaining theory; tutorials will be used to practice the theory by means of problem sets.

Assessment method
Mid-term exam (30%):
The mid-term is an individual exam, covering the topics dealt with in the first 4 weeks of the course.

End-term exam (70%):
The mid-term is an individual exam, covering the topics dealt with in weeks 1 to 7 of the course.

Intended Learning Outcomes

• Being able to think and act at an academic level.
• Solving problems, accounting for social aspects.
• Communicating in English at an academic level.
• The graduate has, at an academic level, the knowledge and understanding of how to apply economic theory for addressing contemporary transformations such as technological change, climate change, sustainable transitions, migration, or ageing.
• The graduate is able to interpret economic theories to identify potential causes and consequences of such contemporary transformations.

In case online access is required for this course and you are unable (or do not want) to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.