Advanced Microeconomic Theory – II

Paper Code: 
24DECO 801
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

1.To orient the students with various managerial and behavioural theories of firm

2. To acquaint the students with general equilibrium and welfare economics

3. To equip students with the knowledge of market failure

 

Course Outcomes: 

Course  Code

Course Title

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

   

24DECO 801

Advanced Microeconomic Theory-II

(Theory)

Students will:

CO85:analyze different managerial and behavioral theories of the firm.

CO86:analyze factor pricing and income distribution,

CO87: analyze general equilibrium and welfare economics,

CO88: analyze behavioral economics and information technology

CO89:analyze different aspects of market failure

CO90:contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures, Discussion,  Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments and  Semester end examinations.

 

18.00
Unit I: 
Managerial and Behavioural Theories of the Firm
  • Baumol’s theory of sales revenue maximisation
  • Marris’s model of the managerial enterprise
  • O. Williamson model of managerial discretion
  • Behavioural model of Cyert and March

 

18.00
Unit II: 
Factor Pricing and Income Distribution
  • Derivation of factor demand and supply curves under perfect and imperfect competitions and equilibrium
  • Bilateral monopoly
  • Competitive buyer firm and monopoly union
  • Technical progress and income distribution
  • Pricing of fixed factors
  • Adding up problem

 

18.00
Unit III: 
General Equilibrium and Welfare Economics
  • Interdependence in the economy
  • the Walrasian system, existence, uniqueness and stability of an equilibrium,
  • path to general equilibrium in pure exchange and production, 2x2x2 general equilibrium model, prices of commodities and factors
  • criteria of social welfare( growth of GNP, Bentham, cardinalists, Pareto optimality, Kaldor Hicks, Bergson criteria)
  • types of social welfare function
  • Grand utility possibility frontier and the point of bliss

 

18.00
Unit IV: 
Behavioural Economics and Information Technology
  • Behavioural Economics –Framing effects in consumer choice, uncertainty, time, strategic interaction and social norms
  • Information Technology-Systems competition, problems of complements, lock-in, network externalities and markets, market dynamics, two-sided markets, rights management, sharing intellectual property

 

18.00
Unit V: 
Market Failure
  • Externalities- Smokers and non-smokers, Coase theorem, production externalities, market signals, tragedy of the commons
  • Public goods- Providing public goods, free riding and the free rider problem, different levels of public goods, quasilinear preferences and public goods, voting, the Vickrey-Clarke-Groves mechanism
  • Asymmetric information- Market for lemons, quality choice, adverse selection, moral hazard, signalling, incentives, asymmetric information

 

Essential Readings: 
  1. Koutsoyiannis, Modern Microeconomics, ELBS/Macmillan, 1979
  2. Hal R. Varian, Intermediate Microeconomics, a Modern Approach, W.W. Norton and Company/Affiliated East-West Press (India), 8th edition, 2014
  3. Pindyck, Robert S., Rubinfeld, Daniel L. and Mehta, Prem L., Microeconomics, Pearson Education, 2009

 

References: 

Suggested Readings:

  1. Marshall, Alfred (1926), Principles of Economics, Macmillan
  2. Robinson, Joan (1933), The Economics of Imperfect Competition, Macmillan
  3. Chamberlin, E. H. (1933), The Theory of Monopolistic Competition, Harvard University Press
  4. Fellner, W.(1949), Competition among the Few, Knopf
  5. Hicks, Sir John R. (1963), The Theory of Wages, 2nd ed., Macmillan

e-Resources:

  •  

2. journals.indexcopernicus.com/api/file/---

3. ir.inflibnet.ac.in:8443/ir/bitstream/1944

4. worldwidescience.org/topicpages/e/economics+electronic+resource.html

5. https://edge.sagepub.com

6. https://libraries.ou.edu

 

Journals:

1. American Economic Journal : Microeconomics,                 https://www.jstor.org/journal/aejmicrecon

2. Journal of Economics, https://www.springer.com/journal/712

 

Academic Session: