Opintojakson tiedot

Master’s Programme in Economics (General Track). Open to all.

First autumn term, after completing Microeconomics 1

After the course, the student should

• Be familiar with main problems in the economics of information as well as the standard modelling techniques.
• Understand the mechanisms behind standard problems of information economics: adverse selection, moral hazard and signalling

The course consists of lectures (24 hours) and exercises either in separate sessions or integrated into the lectures. The lectures and exercise sessions are not mandatory. There is a written final exam and four internet quizzes based on the homework assignments. The homework assignments consist of mostly theoretical exercises.

The course builds partly upon the contents of Microeconomics 1. Hence, the student is assumed to be familiar with the expected utility theory and the theory of choice

Knowledge of basic analysis is certainly an advantage.

The course provides an overview of the issues arising in the economics of information. We cover the problems of moral hazard, adverse
selection and signalling. Understanding how private information and incentives in these problems interact is a prerequisite for understanding many of the problems in labour and financial markets as well as in the field of politics. We also cover problems related to externalities and some auction theory.

Jehle and Reny: Advanced Microeconomic Theory (3rd ed.), Chapter 7. The information economics part is based mostly on lectures.

All material related to the course is delivered through Moodle. It also contains a discussion forum where students can discuss issues related to the course with each other and the teacher. Each homework assignment involves multiple-choice questions that the students answer through Moodle before the exercise sessions related to the homework assignment.

The grade on a scale from 0 (fail) to 5 is based on the sum of points earned in the final exam and from the homework assignments and potential classroom activities. The points are scaled such that the maximum number of points is 100, of which 60 come from the final exam and 40 from the homework assignments and other activities. To pass the course, the student must earn at least 50 points in total and at least 30 points from the final exam.