A list of topics covered in this course is available in the calendar below.
Prerequisites
Microeconomic Theory I (14.121), Contract Economics (14.281), or permission of instructors.
Requirements (Overview)
Complete 4 homework assignments
Make a 25-minute presentation
No exams, no paper required. Students are encouraged to start, write, and present their papers.
Textboook
The primary book for this course is:
Bolton, Patrick, and Mathias Dewatripont. Contract Theory. Cambridge, MA: MIT Press, 2005. ISBN: 9780262025768.
Please see readings for more information.
Assignments
There are 4 homework assignments. You will have at least two weeks to complete each one. (Some) will have a problem: to ask a question and provide an answer.
Presentation
Paper is chosen by the student or suggested by the professor. Own relevant papers are allowed. Style: 25-minutes conference presentation. Includes: motivation, contribution, main points, and critical analysis. Also, would require written short report briefly outlining contribution of the paper and of related papers. In case, two or more related papers are presented by several students, one report from the group will suffice.
Students are also required to discuss the paper (and presentation) of at least one other student. (Since the presentations are made two per class, naturally presenters provide comments on each other). It is important to have these discussions as it engages at least two students on the same project.
Recommended Citation
For any use or distribution of these materials, please cite as follows:
Sergei Izmalkov, course materials for 14.129 Advanced Contract Theory, Spring 2005. MIT OpenCourseWare (http://ocw.mit.edu/), Massachusetts Institute of Technology. Downloaded on [DD Month YYYY].
Course calendar.| Lec # | topics |
|---|
| Games with Incomplete Information |
| 1 | Bayesian-Nash games |
| Auctions and Mechanism Design |
| 2 | Auctions I: Common auctions, revenue equivalence, and optimal mechanisms |
| 3 | Auctions II: Independent private values (IPV) and revenue equivalence |
| 4 | Auctions III: Interdependent values and linkage principle Auctions IV: Multiunit auctions and Cremer-McLean mechanism |
| Static Models |
| 5 | Simple models: Hidden information, Spence's model, and hidden action |
| 6 | Moral hazard: Multiple agents |
| Dynamic Models |
| 7 | Dynamic adverse selection: DG monopoly with fixed types |
| 8 | Dynamic moral hazard |
| Surplus Division |
| 9 | Surplus division, fair distribution, the Shapley value, and Nash bargaining solution |