Advanced Microeconomics

Knowledge

Students are expected to have a solid foundation in basic microeconomics and introductory mathematics for economists. This includes familiarity with concepts such as supply and demand, market equilibrium, elasticity, and consumer and producer theory.
A working knowledge of calculus (particularly differentiation and optimization) and basic algebra is required to follow the analytical models discussed in the course.

Prior exposure to game theory, industrial organization, or data-driven market analysis is helpful but not mandatory. Students should also be prepared to engage with mathematical reasoning and to apply economic logic to real-world problems and digital market structures.

Description

Course Description

This course deepens the understanding of modern microeconomic theory and its applications in market analysis and policy design. It builds upon foundational principles to explore the mechanisms of market organization, strategic interaction, and allocative efficiency.

Key topics include:

1. Microeconomics – History and Principles: Development of microeconomic thought and its analytical foundations.

2. Industrial Organization: Structures, conduct, and performance of firms and industries.

3. Competition Theory: Strategic behavior, entry deterrence, and innovation dynamics.

4. Market Models and Design: Market equilibrium, mechanism design, and regulatory interventions.

5. Market Deterrence Theory: Barriers to entry, strategic commitment, and reputation effects.

6. Allocation Theory and Cost-Benefit Analysis: Efficiency, welfare, and public decision-making.

7. Platform Economics and the Economics of AI: Network effects, data-driven markets, and algorithmic pricing mechanisms.

The course combines theoretical rigor with applied perspectives from digital markets, mobility ecosystems, and AI-based business models.

Learning objectives

Upon successful completion of this course, students will be able to:

1. Apply advanced microeconomic theories to analyze individual and firm behavior under various market structures.

2. Critically assess models of industrial organization and their implications for competition, innovation, and market efficiency.

3. Evaluate strategic interactions using tools from game theory, deterrence theory, and mechanism design.

4. Conduct cost-benefit and welfare analyses for public and private decision-making contexts.

5. Design and interpret market models with attention to regulatory frameworks, market failures, and policy interventions.

6. Understand and explain platform economics and the role of AI and data-driven systems in reshaping markets and competition.

7. Integrate theoretical and empirical insights to formulate policy recommendations and strategic business decisions in digitally transformed industries.

E-learning

The course is complemented by digital materials available on the university’s learning platform. These include selected exercises, datasets, and accompanying case studies designed for independent study and deeper engagement with the course content. The digital resources support individual learning progress and the application of theoretical concepts to practical questions.

Preparation

Students are expected to review fundamental microeconomic concepts and mathematical tools prior to the course. Familiarity with demand and supply analysis, consumer and producer theory, and basic optimization methods is required.
Recommended preparatory reading includes chapters on market structures, welfare analysis, and cost-benefit evaluation from standard microeconomics textbooks (e.g., Varian, Perloff, or Nicholson & Snyder).
Students should also acquaint themselves with key diagrams and analytical models in Blaug & Lloyd (2010): Famous Figures and Diagrams in Economics, which form the basis for the course assignments.

Comment

The course emphasizes analytical rigor and conceptual clarity while linking classical microeconomic theory to contemporary economic challenges. By revisiting foundational models and exploring their modern relevance, students gain a deeper understanding of how microeconomic reasoning informs policy design, market regulation, and digital transformation.
Interactive discussions and short presentations foster critical reflection and the ability to translate theoretical insights into practical contexts.

Detailed information about the examinations

Anyone who is absent without excuse more than twice will be graded as failed.

The examination consists of two components — an individual or group presentation and a written essay — both based on the seminal work “Famous Figures and Diagrams in Economics” by Mark Blaug and Peter Lloyd (2010).

1. Presentation (First Assessment Component)
Each student (or group of up to three students) selects one chapter from Blaug & Lloyd (2010) and presents it in class.

• Duration: 10 minutes per person.

• Objective: To explain the theoretical foundation, historical relevance, and analytical structure of the selected concept or diagram.

• Format: Students may use slides or digital visualizations to illustrate key arguments and models.

2. Essay (Second Assessment Component)
Each student submits an individual essay on the contemporary significance of the chosen topic in microeconomic theory or policy.

• Length: Maximum of 5,000 characters (excluding spaces).

• Visuals: Up to two graphics are allowed (each counts as 300 characters).

• Focus: The essay should critically discuss how the selected concept contributes to current economic debates, empirical research, or policy design.

Examples of eligible topics include:
The Harberger Triangle; Community Indifference Curves and the Scitovsky “Paradox”; The Taxation of External Costs; Backward-Bending Labour Supply Curves; Production Possibility Frontiers; The Utility-Possibility Frontier; The Factor Price Frontier; Baumol’s Theory of Sales Revenue Maximisation; Marris’s Model of the Managerial Enterprise; The Behavioural Model of Cyert and March; Bain’s Limit Pricing Theory; Homothetic Production and Utility Functions; The Product Exhaustion Theorem.

Grading Criteria:

• Conceptual clarity and theoretical accuracy

• Analytical depth and critical discussion

• Relevance and originality in connecting theory with current microeconomic challenges

• Coherence of argumentation and visual presentation

Second additional field

Please indicate the language of the course here: English