Microeconomics: Theory and Applications I

A microeconomic model of a developing economy to understand land, credit, and labour. 

Most markets, especially in developing countries, operate with contracts that are, to some extent, unverifiable, unmeasurable or unenforceable. The first course in microeconomics set up a framework for analyzing markets with incomplete contracts using models of strategic interactions. The course begins with a review of game theory and then sets up models that incorporate features like repeated interactions, contingent renewal etc. to explain market exchange in the presence of incomplete contracts. It then proceeds to apply this general framework to models of insurance, credit and labour markets. Students will also read some empirical papers in these areas to understand some of the questions that these models try to answer.