Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (29.09.2006)
The focus of the course is a rigorous mathematical treatment of basic models of decision-making and strategic interaction in the presence of imperfect and incomplete information. The course covers basic moral hazard, adverse selection, and signaling problems. Applications to labor markets, corporate governance, financial markets, credit and insurance will be discussed.
Cíl předmětu -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
The focus of the course is a rigorous mathematical treatment of basic models of decision-making and strategic interaction in the presence of imperfect and incomplete information. The course covers basic moral hazard, adverse selection, and signaling problems. Applications to labor markets, corporate governance, financial markets, credit and insurance will be discussed.
Literatura -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (05.10.2006)
References:
I. Macho-Stadler and J. D. Perez-Castrillo: An Introduction to the Economics of Information: Incentives and Contracts Oxford, Oxford University Press, 2001 ; main textbook.
R. Gibbons: Game Theory for Applied Economists, Princeton University Press, 1992 - good treatment of signalling and other game theoretic issues.
A few additional references for those who want more books to study:
Jean Tirole: The Theory of Corporate Finance, Princeton University Press, 2006
Patrick Bolton, Mathias Dewatripont: Contract Theory, 2005
Martin J. Osborne: An Introduction to Game Theory, 2003
Mathias Dewatripont, Jean Tirole: The Prudential Regulation of Banks, 1994
X. Freixas and J. Rochet: Microeconomics of Banking, Cambridge, MIT Press, 1999 - supplementary textbook with application to banking.
O. Hart: Firms, Contracts, and Financial Structure, Clarendon Press, 1995 – supplementary textbook.
J. Laffont and D. Martimort: The Theory of Incentives: The Principal-Agent Model. Princeton University Press, 2002 - supplementary textbook. State of the art textbook treatment of contract theory.
B. Salanie: The Economics of Contracts. A Primer, Cambridge, MIT Press, 2005; supplementary textbook, more advanced than Macho-Stadler and Perez-Castrillo.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
References:
I. Macho-Stadler and J. D. Perez-Castrillo: An Introduction to the Economics of Information: Incentives and Contracts Oxford, Oxford University Press, 2001 ; main textbook.
R. Gibbons: Game Theory for Applied Economists, Princeton University Press, 1992 - good treatment of signalling and other game theoretic issues.
A few additional references for those who want more books to study:
Jean Tirole: The Theory of Corporate Finance, Princeton University Press, 2006
Patrick Bolton, Mathias Dewatripont: Contract Theory, 2005
Martin J. Osborne: An Introduction to Game Theory, 2003
Mathias Dewatripont, Jean Tirole: The Prudential Regulation of Banks, 1994
X. Freixas and J. Rochet: Microeconomics of Banking, Cambridge, MIT Press, 1999 - supplementary textbook with application to banking.
O. Hart: Firms, Contracts, and Financial Structure, Clarendon Press, 1995 ? supplementary textbook.
J. Laffont and D. Martimort: The Theory of Incentives: The Principal-Agent Model. Princeton University Press, 2002 - supplementary textbook. State of the art textbook treatment of contract theory.
B. Salanie: The Economics of Contracts. A Primer, Cambridge, MIT Press, 2005; supplementary textbook, more advanced than Macho-Stadler and Perez-Castrillo.
Metody výuky -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Lectures.
Požadavky ke zkoušce -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
The students are evaluated according to written exams.
There will be 4 exams available to take for this class. 2 exams with highest score will determine your score. Each of these two exams may give you up to 45 points. You may get additional 5 points for activity in class and 5 points for preparing short presentation dealing with relevance of covered topics for everyday practical life. So totally you may obtain up to 100 points.
I plan to use relative performance approach to the grading (that is, "grading on the curve"). This means in particular that the position of any student "on the curve" almost always is not sure up to the time of last test being taken.
Cheating or other academic dishonesty during exam implies 0 for a particular exam and 10 points taken away from total in the case of slight dishonesty (20 points in the case of serious dishonesty). Any communication among the students during the exam is considered as cheating. Therefore during the exam communicate only with the exam supervisor. You may take watch and simple calculator for exams. Do not take any mobile phones or any other electronic devices for exams.
Sylabus -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Email: Karel-Janda@seznam.cz
Office Hours:
room 408, Opletalova 26;
room 173NB, W. Churchilla Square 4;
Explanations:
W.Churchilla Square 4 is the main building of University of Economics, Prague.
Opletalova 26 is the building of Institute of Economic Studies of Charles University.
Lecture 1: Overview of contract theory, examples of moral hazard, adverse selection, signalling. Concavity and optimization. (Macho-Stadler, Perez-Castrillo (MSPC) ch. 1, Math Appendix)
Lecture 2: Kuhn-Tucker conditions. (MSPC Math Appendix)
Lecture 3: Base Model - symmetric information, optimal payment mechanism in Base Model. (MSPC ch. 2)
Lecture 4: Base Model continued - different attitudes to risk, optimal level of effort. (MSPC ch. 2)
Lecture 5: Moral hazard - two effort levels. (MSPC ch.3.1-3.3)
Lecture 6: Two effort levels continued. (MSPC ch. 3.3)
Lecture 7: First order approach, financial contracting examples. (MSPC ch. 3.4)
Lecture 8: Financial contracting examples. Introduction to signalling .
Lecture 10: Signalling - refinements of Bayesian Nash Equilibrium. Real life presentations.
Lecture 11: Financial contracting applications.
Lecture 12: Real life presentations.
Lecture 13: Conclusion of the class.
I will be available to write the grade into your index during the "regular index time ".
In the case you are not able to make it on the "regular index time", you may come to any "additional index time":
Explanations:
W.Churchilla Square 4 is the main building of University of Economics, Prague.
Opletalova 26 is the building of Institute of Economic Studies of Charles University.
Libraries, teaching texts availability:
I will try to provide you with relevant handouts. There are libraries with books relevant to our class both at University of Economies and Institute of Economic Studies. I asked the librarians at University of Economies and Institute of Economic Studies to put one copy of the main textbook for our class on reserve. I also arranged for a few copies of Microeconomics of Banking and An Introduction to the Economics of Information: Incentives and Contracts to be available for take-home loans at Institute of Economic Studies library. In addition, the best economic library in Prague is at CERGE-EI on Politickych veznu 7 street. The CERGE-EI library has all the books relevant for our class, some of them available for take-home loans.
The students are evaluated according to written exams.
There will be 4 exams available to take for this class. 2 exams with highest score will determine your score. Each of these two exams may give you up to 45 points. You may get additional 5 points for activity in class and 5 points for preparing short presentation dealing with relevance of covered topics for everyday practical life. So totally you may obtain up to 100 points.
I plan to use relative performance approach to the grading (that is, "grading on the curve"). This means in particular that the position of any student "on the curve" almost always is not sure up to the time of last test being taken.
Cheating or other academic dishonesty during exam implies 0 for a particular exam and 10 points taken away from total in the case of slight dishonesty (20 points in the case of serious dishonesty). Any communication among the students during the exam is considered as cheating. Therefore during the exam communicate only with the exam supervisor. You may take watch and simple calculator for exams. Do not take any mobile phones or any other electronic devices for exams.
Vstupní požadavky -
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Please switch to English since the class is conducted in English only.
Poslední úprava: prof. Ing. Karel Janda, Dr., Ph.D., M.A. (06.04.2008)
Obligatory courses: None
Recommended courses: JEM003 - Advanced Microeconomics I
