School of Business and Economics
Economics of Uncertainty and Information
Volledige vakbeschrijving
This course, which falls under the area of mathematical economics and belongs to the Bachelor program Econometrics and Operations Research, gives an introduction to the microeconomic theory of uncertainty and information. In the course, we study basic elements of the role that information plays in the decisions of individuals and firms, as well as in the working of markets. This is done by combining elementary methods of microeconomics with those from elementary probability theory. First, we introduce expected utility maximization, the standard model of choice under uncertainty. We then use this model to study numerous important issues arising from incomplete information, such as attitudes toward risk, demand for insurance, portfolio selection, value of information, (in)efficiency of markets, moral hazard, and adverse selection.Doelstellingen van dit vak
(1) Get familiar with the microeconomic theory of uncertainty and information, its conclusions, limitations, and main applications;(2) Acquire a working knowledge of techniques to analyze problems of choice under uncertainty and of asymmetric information.
Voorwaarden
Prior knowledge in microeconomics equivalent to the course Microeconomics (EBC1012) is essential. Recommended are also the courses Probability Theory (EBC1024), Analysis II (EBC1032), and Game Theory and Economics (EBC2110).Aanbevolen literatuur
Bikhchandani, S., J. Hirshleifer, and J.G. Riley (2013), The Analytics of Uncertainty and Information, 2nd edition, Cambridge University Press, Cambridge.EBC2108
Periode 5
7 apr 2025
6 jun 2025
Studiepunten:
6.5Taal van de opleiding:
EngelsCoördinator:
Onderwijsmethode:
Assignment(s), Lecture(s), PBLEvaluatiemethoden:
Written exam