• This course studies the design of institutions that optimally cope with fundamental, longstanding economic questions (allocation of private goods, public good provision, trade).

• We start from a simple, institution-free description of each question, try to understand the basic tensions at work, and derive institutions that optimally address these tensions.

• In the process, we introduce the important ideas of social choice, game theory, and market design.

Here is a pdf version of the syllabus.

Lecture Notes

1. Road map

2. Social choice

3. Efficiency and welfare

4. The exchange economy

5. Externalities

6. Game theory

7. Imperfect competition

8. Auctions for single, indivisible goods

9. Vickrey auctions and VCG mechanism

10. Trade and adverse selection

Textbooks

No textbook is needed for the course, and the slides are the main support for the course. To complement the course with further readings, it is worth looking at:

• Robert S. Pindyck; Daniel L. Rubinfeld. Microeconomics, Eighth Edition. Pearson. 2013

• Bernard Salanié, 2000. Microeconomics of Market Failures. MIT Press Books, The MIT Press. (Also French version at Economica)

Books to read during or after this course

Acemoglu & Robinson, Why Nations Fail. (Prospérité, puissance et pauvreté)

List & Gneezy, The Why Axis.

Kahneman, Thinking, Fast and Slow.

Tirole, Economie du Bien Commun. (Economics for the Common Good)

Deaton, Deaths of Despair and the Future of Capitalism

Levitt, Freakonomics

Collier, The Future of Capitalism