Individual Decision-Making | |

Introduction to Part I | |

Preference and Choice | |

Introduction | |

Preference Relations | |

Choice Rules | |

The Relationship between Preference Relations and Choice Rules | |

Exercises | |

Consumer Choice | |

Introduction | |

Commodities | |

The Consumption Set | |

Competitive Budgets | |

Demand Functions and Comparartive Statics | |

The Weak Axiom of Revealed Preference and the Law of Demand | |

Exercises | |

Classical Demand Theory | |

Introduction | |

Preference Relations: Basic Properties | |

Preference and Utility | |

The Utility Maximization Problem | |

The Expenditure Minimization Problem | |

Duality: A Mathematical Introduction | |

Relationships between Demand, Indirect Utility, and Expenditure Functions | |

Integrability | |

Welfare Evaluation of Economic Changes | |

The Strong Axiom of Revealed Preference | |

Appendix: Continuity and Differentiability Properties of Walrasian Demand | |

Exercises | |

Aggregate Demand | |

Introduction | |

Aggregate Demand and Aggregate Wealth | |

Aggregate Demand and the Weak Axiom | |

Aggregate Demand and the Existence of a Representative Consumer | |

Appendix: Regularizing Effects of Aggregation | |

Exercises | |

Production | |

Introduction | |

Production Sets | |

Profit Maximization and Cost Minimization | |

The Geometry of Cost and Supply in the Single Output Case | |

Aggregation | |

Efficient Production | |

Remarks on the Objectives of the Firm | |

Appendix: The Linear Activity Model | |

Exercises | |

Choice under Uncertainty | |

Introduction | |

Expected Utility Theory | |

Money Lotteries and Risk Aversion | |

Comparison of Payoff Distributions in Terms of Return and Risk | |

State Dependent Utility | |

Subjective Probability Theory | |

Exercises | |

Game Theory | |

Introduction to Part II | |

Basic Elements of Non-Cooperative Games | |

Introduction | |

What is a Game? | |

The Extensive Form Representation of a Game | |

Strategies and the Normal Form Representation of a Game | |

Randomized Choices | |

Exercises | |

Simultaneous-Move Games | |

Introduction | |

Dominant and Dominated Strategies | |

Rationalizable Strategies | |

Nash Equilibrium | |

Games of Incomplete Information: Bayesian Nash Equilibrium | |

The Possibility of Mistakes: Trembling-Hand Perfection | |

Appendix: Existence of Nash Equilibrium | |

Exercises | |

Dynamic Games | |

Introduction | |

Sequential Rationality, Backwards Induction, and Subgame Perfection | |

Sequential Rationality and Out-of-Equilibrium Beliefs | |

Reasonable Beliefs, Forward Induction, and Normal Form Refinements | |

Finite and Infinite Horizon Bilateral Bargaining | |

Extensive Form Trembling-Hand Perfection | |

Exercises | |

Market Equilibrium And Market Failure | |

Introduction to Part III | |

Competitive Markets | |

Introduction | |

Pareto Optimality and Competitive Equilibria | |

Partial Equilibrium Competitive Analysis | |

The Fundamental Welfare Theorems in a Partial Equilibrium Context | |

Welfare Analysis in the Partial Equilibrium Model | |

Free-Entry and Long-Run Competitive Equilibria | |

Concluding Remarks on Partial Equilibrium Analysis | |

Exercises | |

Externalities and Public Goods | |

Introduction | |

A Simple Bilateral Externality | |

Public Goods | |

Multilateral Externalities | |

Private Information and Second-Best Solutions | |

Appendix: Non-Convexities and the Theory of Externalities | |

Exercises | |

Market Power | |

Introduction | |

Monopoly Pricing | |

Static Models of Oligopoly | |

Repeated Interaction | |

Entry | |

The Competitive Limit | |

Strategic Precommitments to Affect Future Competition | |

Infinitely Repeated Games and the Folk Theorem | |

Strategic Entry Deterrence and Accommodation | |

Exercises | |

Adverse Selection, Signalling, and Screening | |

Introduction | |

Informational Asymmetries and Adverse Selection | |

Signalling | |

Screening | |

Appendix: Reasonable-Beliefs Refinements in Signalling Games | |

Exercises | |

The Principal-Agent Problem | |

Introduction | |

Hidden Actions (Moral Hazard) | |

Hidden Information (and Monopolistic Screening) | |

Hidden Actions and Hidden Information: Hybrid Models | |

Multiple Effort Levels in the Hidden Action Model | |

A Formal Solution of the Principal-Agent Problem with Hidden Information | |

Exercises | |

General Equilibrium | |

Introduction to Part IV | |

General Equilibrium Theory: Some Examples | |

Introduction | |

Pure Exchange: The Edgeworth Box | |

The One Consumer-One Producer Economy | |

The 2x2 Production Model | |

General versus Partial Equilibrium Theory | |

Exercises | |

Equilibrium and Its Basic Welfare Properties | |

Introduction | |

The Basic Model and Definitions | |

The First Fundamental Theorem of Welfare Economics | |

The Second Fundamental Theorem of Welfare Economics | |

Pareto Optimality and Social Welfare Optima | |

First-Order Conditions for Pareto Optimality | |

Some Applications | |

Appendix: Technical Properties of the Set of Feasible Allocations | |

Exercises | |

The Positive Theory of Equilibrium | |

Introduction | |

Equilibrium: Definitions and Basic Equations | |

Existence of Walrasian Equilibrium | |

Local Uniqueness and the Index Theorem | |

Anything Goes: The Sonnenschein-Mantel-Debreu Theorem | |

Uniqueness of Equilibria | |

Comparative Statics Analysis | |

Tatonnement Stability | |

Large Economies and Non-Convexities | |

Characterizing Equilibrium through Welfare Equations | |

A General Approach to the Existence of Walrasian Equilibrium | |

Exercises | |

Some Foundations for Competitive Equilibria | |

Introduction | |

Core and Equilibria | |

Non-Cooperative Foundations of Walrasian Equilibria | |

The Limits to Redistribution | |

Equilibrium and the Marginal Productivity Principle | |

Appendix: Cooperative Game Theory | |

Exercises | |

General Equilibrium under Uncertainty | |

Introduction | |

A Market Economy with Contingent Commodities: Description | |

Arrow-Debreu Equilibrium | |

Sequential Trade | |

Asset Markets | |

Incomplete Markets | |

Firm Behavior in General Equilibrium Models under Uncertainty | |

Imperfect Information | |

Exercises | |

Equilibrium and Time | |

Introduction | |

Intertemporal Utility | |

Intertemporal Production and Efficiency | |

Equilibrium: The One-Consumer Case | |

Stationary Programs, Interest Rates, and Golden Rules | |

Dynamics | |

Equilibrium: Several Consumers | |

Overlapping Generations | |

Remarks on Non-Equilibrium Dynamics: Tatonnement and Learning | |

Exercises | |

Welfare Economics And Incentives | |

Introduction to Part V | |

Social Choice Theory | |

Introduction | |

A Special Case: Social Preferences over Two Alternatives | |

The General Case: Arrow's Impossibility Theorem | |

Some Possibility Results: Restricted Domains | |

Social Choice Functions | |

Exercises | |

Elements of Welfare Economics and Axiomatic Bargaining | |

Introduction | |

Utility Possibility Sets | |

Social Welfare Functions and Social Optima | |

Invariance Properties of Social Welfare Functions | |

The Axiomatic Bargaining Approach | |

Coalitional Bargaining: The Shapley Value | |

Exercises | |

Incentives and Mechanism Design | |

Introduction | |

The Mechanism Design Problem | |

Dominant Strategy Implementation | |

Bayesian Implementation | |

Participation Constraints | |

Optimal Bayesian Mechanisms | |

Implementation and Multiple Equilibria | |

Implementation in Environments with Complete Information | |

Exercises | |

Mathematical Appendix | |

Introduction | |

Homogeneous Functions and Euler's Formula | |

Concave and Quasiconcave Functions | |

Matrices: Negative (Semi)Definiteness and Other Properties | |

The Implicit Function Theorem | |

Continuous Functions and Compact Sets | |

Convex Sets and Separating Hyperplanes | |

Correspondences | |

Fixed Point Theorems | |

Unconstrained Maximization | |

Constrained Maximization | |

The Envelope Theorem | |

Linear Programming | |

Dynamic Programming | |

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