- Period 1.
- Track-dependent mandatory course.
The course starts by building a strong foundation of econometric techniques adapted to the analysis of ‘panel’ or ‘longitudinal’ data sets. After reviewing the standard linear regression model and hypothesis testing, the student will study the specification, estimation, and inference in the context of models that include individual (firm, person, etc.) effects. A major focus will be on the application of these econometric techniques to real-world examples using the statistical software Stata. Applications include explaining individual wages, house prices, expenditures on alcohol; estimating the returns on schooling or the wage elasticity of labour demand. Subsequently the course continues studying economic models that explain how and why economic entities (consumers, producers, industries, governments, etc.) behave as they do. We will concentrate on the interaction between microeconomic theory and events, decisions and empirical data from the real world. In particular, we will cover risk and expected utility theory, game theory and industrial organization, economics of innovation, welfare economics and auction theory.
This course aims at providing a solid understanding of microeconomic theory and at introducing modern panel data econometric techniques, thereby enabling students to apply those tools and ideas. Specific learning outcomes upon completion of this curricular item are:
- acquiring basic knowledge in employment decisions, inter-temporal decisions and the impact of uncertainty on consumer behavior
- analyzing decision-making by firms in monopolistic and oligopolistic markets
- being able to evaluate public economic policy including competition law aimed at correcting market failures in imperfectly competitive markets
- gaining insight into the incentives to and constraints ono innovative activities as well their relation with imitation, spillovers, firm size and market structure
- being familiar with the assumptions underlying cost-benefit analysis and alternative approaches to making welfare comparisons across different economic policies; acquiring basic knowledge in the core ideas of auction theory and mechanism design more generally
- being able to apply core panel data econometric techniques in economic model building and analysis