Lectures on Microeconomics

by Pancs

ISBN: 9780262364454 | Copyright 2018

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Economic concepts and techniques presented through a series of “big questions,” models that show how to pose a question rigorously and work toward an answer.This book helps readers master economic concepts and techniques by tackling fundamental economic and political questions through a series of models. It is organized around a sequence of “big questions,” among them: When do markets help translate individuals' uncoordinated, selfish actions into outcomes that are best for all? Do markets change people, and, if so, for worse or better? Translated into the language of modern economics, do Marx's ideas have merit? Why is there so much income inequality? Or is there too little? The arguments are in the theorem-proof format, distinguishing results derived in the context of fully specified models from educated speculation. Readers will learn how to pose a question rigorously and how to work toward an answer, and to appreciate that even (especially!) the broadest and most ambitious questions call for a model. The goal of the book is not to indoctrinate but to show readers how to reason toward their own conclusions.The first chapter, on the Walrasian model of general equilibrium, serves as the prerequisite for the rest of the book. The remaining chapters cover less conventional topics, including the morality of markets; matching theory; Marxism, socialism, and the resilience of markets; a formalization of Kant's categorical imperative; unintended consequences of policy design; and theories of justice. The book can be used as a textbook for advanced undergraduate or graduate students or as a resource for researchers in disciplines that draw on normative economics.
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Contents (pg. v)
Notation (pg. ix)
Preface (pg. xi)
Chapter 1. General Equilibrium in Competitive Markets (pg. 1)
1.1 Introduction (pg. 1)
1.2 An Exchange Economy (pg. 3)
1.3 Prediction: The Contract Set (pg. 3)
1.4 A Refined Prediction: Walrasian Equilibrium (pg. 5)
1.5 Common Assumptions (pg. 8)
1.6 Graphical Illustrations in the Edgeworth Box (pg. 10)
1.7 The First Welfare Theorem (pg. 16)
1.8 The Second Welfare Theorem (pg. 18)
1.9 Equilibrium Existence (and Nonexistence) (pg. 22)
1.10 Uniqueness, Stability, and Comparative Statics (pg. 31)
1.11 Time and Uncertainty (pg. 43)
1.12 Concluding Remarks (pg. 50)
1.13 Appendix: A Proof Sketch of Theorem 1.3 (pg. 53)
1.14 Bibliographical Notes (pg. 57)
Problems (pg. 58)
Chapter 2. Markets and Morals I (pg. 71)
2.1 Introduction (pg. 71)
2.2 Obedience to Authority Leads to Immoral Behavior (pg. 73)
2.3 Markets Lead to Immoral Behavior (pg. 75)
2.4 Markets Lead to Moral Behavior (pg. 81)
2.5 Concluding Remarks (pg. 86)
2.6 Bibliographical Notes (pg. 87)
Problems (pg. 88)
Chapter 3. From the Jungle to Design Economics (pg. 91)
3.1 Introduction (pg. 91)
3.2 The Jungle Economy (pg. 92)
3.3 Jungle versus Walrasian Market (pg. 97)
3.4 A Metaphor for TTC in Walrasian Context (pg. 106)
3.5 Matching Agents to Agents (pg. 112)
3.6 Concluding Remarks (pg. 124)
3.7 Bibliographical Notes (pg. 125)
Problems (pg. 126)
Chapter 4. Marxism, Socialism, and the Resilience of Markets (pg. 133)
4.1 Introduction (pg. 133)
4.2 Exploitation in a Production Economy (pg. 133)
4.3 The Prevalence of Markets: The Core (pg. 140)
4.4 Socialism (pg. 150)
4.5 Concluding Remarks (pg. 161)
4.6 Bibliographical Notes (pg. 162)
Problems (pg. 162)
Chapter 5. Inequality (pg. 171)
5.1 Introduction (pg. 171)
5.2 Risk Seeking (pg. 173)
5.3 Superstars (pg. 175)
5.4 Artificial Intelligence and the Future of Inequality (pg. 189)
5.5 Concluding Remarks (pg. 200)
5.6 Bibliographical Notes (pg. 201)
Problems (pg. 201)
Chapter 6. Markets and Morals II (pg. 207)
6.1 Introduction (pg. 207)
6.2 When Having Markets Does Not Feel Quite Right (pg. 208)
6.3 A Signaling Model of Gift Giving (pg. 218)
6.4 Concluding Remarks (pg. 229)
6.5 Bibliographical Notes (pg. 230)
Problems (pg. 230)
Chapter 7. Kantian Cooperation (pg. 235)
7.1 Introduction (pg. 235)
7.2 Kantian Equilibrium (pg. 238)
7.3 An Application to Voting (pg. 244)
7.4 An Application to Responsibility (pg. 248)
7.5 Concluding Remarks (pg. 249)
7.6 Bibliographical Notes (pg. 250)
Problems (pg. 251)
Chapter 8. Unintended Consequences of Policy Interventions (pg. 257)
8.1 Introduction (pg. 257)
8.2 The Utilitarian Social Welfare Function (pg. 258)
8.3 Routing (pg. 259)
8.4 Local Public Goods (pg. 270)
8.5 Concluding Remarks (pg. 274)
8.6 Bibliographical Notes (pg. 274)
Problems (pg. 275)
Chapter 9. Coda (pg. 277)
9.1 Methodological Individualism (pg. 277)
9.2 Design by Constrained Optimization (pg. 279)
9.3 Constraints in Economic Design (pg. 288)
9.4 A Curious Case of Incompatible Constraints (pg. 289)
9.5 Economics as an Art Form (pg. 294)
9.6 Bibliographical Notes (pg. 295)
Problems (pg. 296)
References (pg. 301)
Index (pg. 311)

Romans Pancs

Romans Pancs is Assistant Professor of Economics at Instituto Tecnológico Autónomo de México.

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