Glen Weyl: Price Theory and Market Design Fall 2013

Price Theory and Market Design Fall 2013

Teaching

Syllabus

Lecture 1: Introduction

1. “Go East, Young Marijuana Dealer” by Marianne McCune
2. “The ‘Coroboration’ of Theories” by Hilary Putnam
3. “The Economic Approach to Human Behavior” by Gary S. Becker

Lecture 2: Firm Supply and Duration

Required

1. “The Social Responsibility of Business is to Increase Profits” by Milton Friedman

2. “A Survey of Corporate Governance” by Andrei Shleifer and Robert Vishny

3. Course note “Durable and Storable Factors

4. Margin Call by J. C. Chandor

References

• On Time by Peter Diamond

• “Corporate Governance” by Jean Tirole from The Theory of Corporate Finance (substitutes for Shleifer and Vishny)

Lecture 3

Required
1. “Cattle Cycles” by Sherwin Rosen et al. (Econlitで全文読める)
2. Lectures 16-17 from Gary S. Becker’s Economic Theory (p.74- 全部は読めない)
3. “Power Laws in Economics and Finance” by Xavier Gabaix

References
1. “Market Structure and Productivity” by Chad Syverson
2. “Does Management Matter?” by Nicholas Bloom et al.
3. “The Economics of Superstars” by Sherwin Rosen (complements Gabaix)

Lecture 4

Required

1. Course note \The Correspondence Principle"

2. \Walrasian Equilibrium in Large, Quasilinear Markets" by Eduardo M. Azevedo et al. (Section 2)

3. \Consumer's Surplus without Apology" by Robert Willig

4. \Pass-Through as an Economic Tool" by E. Glen Weyl and Michal Fabinger (Sections 1-2)

5. \Ricardo's Theory of Comparative Advantage" by Arnaud Constinot and Dave Donaldson

References

\The Stability of Equilibrium" by Paul Samuelson

\The Permanent Income Hypothesis" by Truman Bewley (complements Willig) Journal of Economic Theory, Volume 16, Issue 2, December 1977, Pages 252–292

\Protection and Real Wages" by Wolfgag F. Stolper and Paul A. Samuelson

\Scale Economies, Product Dierentiation and the Patterns of Trade" by Paul Krugman

\Railroads of the Raj" by Dave Donaldson (complements Costinot and Donaldson)

Lecture 5

Required

1. “The Combinatorial Assignment Problem” by Eric Budish

2. “The Use of Knowledge in Society” by F. A. Hayek

3. “The Data Revolution and Economic Analysis” by Jonathan Levin and Liran Einav

References

• “Dynamics in General Equilibrium Theory” by Stephen Smale

• Sovereign Virtue by Ronald Dworkin (complements Budish)

• “On the (Ir)Relevance of Distribution and Labor Supply Distortion to Government Policy”

by Louis Kaplow

• “The Multi-unit Assignment Problem” by Eric Budish and Estelle Cantillon (complements

Budish)

• On Liberty by John Stuart Mill, Chapter 3

• “The Computer and the Market” by Oskar Lange (complements Hayek)

Lecture 6

Required

1. “An Economic Theory of Tort Law” by Robert Cooter and Thomas Ulen

2. “A Reduced Form Approach to Behavioral Public Finance” by Sendhil Mullainathan et al.

3. Course note “Prices vs. Quantities”

References

• “Sacred Cars?” by Meredith Fowlie et al.

• “Gasoline Prices, Fuel Economy, and the Energy Paradox” by Hunt Allcott and Nathan Wozny (complements Mullainathan et al.)

• “Prices vs. Quantities” by Martin Weitzman (substitutes for course note)

• “Property Rules v. Liability Rules” by Louis Kaplow and Steven Shavell (substitutes for Cooter and Ulen)

• “Information and the Coase Theorem” by Joseph Farrell

• “The Efficiency of Bargaining Under Divided Entitlements” by Ilya Segal and Michael D. Whinston

Lecture 7

Required

1. Executive summary of the “Stern Review on the Economics of Climate Change”

2. “Contingent Valuation” by Peter Diamond and Jerry Hausman

3. “Expected Externalities and Efficiency” by Richard Cornes and Todd Sandler

4. “The Value of Statistical Life” by W. Kip Viscusi and Joseph E. Aldy

References

• “The Property Rights Doctrine and Demand Revelation under Incomplete Information” by Kenneth J. Arrow (substitutes for Cornes and Sandler)

• “Rethinking Cost-Benefit Analysis” by Matthew D. Adler and Eric A. Posner

• “Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods” by Jerry Green and Jean-Jacques Laffont

Lecture 9

Required

1. Chapter 1 from Jean-Jacques Laffont and Jean Tirole’s A Theory of Incentives in Procurement and Regulation

2. “Selection in Insurance Markets” by Liran Einav and Amy Finkelstein

3. “Private Information and Insurance Rejections” by Nathaniel Hendren

References

• “Beyond Testing” by Liran Einav et al.

• “The Economic Effect of Regulation” by Paul L. Joskow and Nancy L. Rose

Lecture 10

Required

1. “The Economics of Internet Markets” by Jonathan Levin

2. “The Leibniz Rule for Multidimensional Heterogeneity” by Andr´e Veiga and E. Glen Weyl

3. “What Drives Media Slant?” by Matthew Gentzkow and Jesse Shapiro

4. “Product Design in Selection Markets” by Andr´e Veiga and E. Glen Weyl (Section 2)

References

• “A Rational Theory of the Size of Government” by Allan H. Meltzer and Scott F. Richard (complements Gentzkow and Shapiro)

• An Economic Theory of Democracy by Anthony Downs

• “A Price Theory of Multisided Platforms” by E. Glen Weyl (substitutes for Levin)

• “Contract Pricing in Consumer Credit Markets” by Liran Einav et al. (complements “Leibniz”)

Lecture 11

Required

1. “The Simple Economics of Optimal Auctions” by Jeremy I. Bulow and John Roberts (Sections I-IV)

2. “Crime and Punishment” by Gary S. Becker (Section IV)

3. “The Optimal Taxation of Height” by N. Gregory Mankiw and Matthew C. Weinzierl

References

• “The Economics of ‘Tagging’ as Applied to Optimal Income Tax, Welfare Programs and Manpower Planning” by George A. Akerlof (complements Mankiw and Weinzierl)

• “Pass-Through as an Economic Tool” by E. Glen Weyl and Michal Fabinger (Subsection 6.3)

• Nonlinear Pricing by Robert Wilson

• “Beyond Price Discrimination” by Yongmin Chen and Marius Schwartz

• Exit, Voice and Loyalty by Albert O. Hirschmann

Lecture 12

Required

1. “The Process of Creative Destruction” by Joseph Schumpeter

2. “Crime and Punishment” by Gary S. Becker

3. Course note “Intellectual Property”

4. “Intellectual Property” by Nancy Gallini and Suzanne Schotchmer

References

• Capitalism, Socialism and Democracy by Joseph Schumpeter (substitutes for Schumpeter)

• “Creating Markets for New Vaccines. Parts I and II” by Michael Kremer (complements course notes and Schumpeter)

• “Intellectual Property Rights and Innovation” by Heidi Williams

• “Do Fixed Patent Terms Distort Innovation? Evidence from Cancer Clinical Trials” by Eric Budish et al.

• “Patent Buyouts” by Michael Kremer

Lecture 13

Required

1. “A Theory of Oligopoly” by George J. Stigler

2. “Pass-Through as an Economic Tool” by E. Glen Weyl and Michal Fabinger (Sections 4 and 5)

3. “What Really Matters in Auction Design?” by Paul D. Klemperer

References

• “The Oligopoly Solution Concept is Identified” by Timothy F. Bresnahan (complements Einav and Levin)

• “The Economics of Tacit Collusion” by Marc Ivalid et al. (substitutes for Stigler)

• “Empirical Industrial Organization” by Liran Einav and Jon Levin

• “Market Power Screens Willingness-to-Pay” by E. Glen Weyl and Jean Tirole (substitutes for course note)

Lecture 14

Required

1. “The First-Order Approach to Merger Analysis” by Sonia Jaffe and E. Glen Weyl

2. “2010 United States Horizontal Merger Guidelines”

3. “Product Design in Selection Markets” by Andr´e Veiga and E. Glen Weyl (Sections 3-5)

4. “Traditional Cournot Analysis” and “Concentration Indices and Industry Profitability” by Jean Tirole

5. “Entry and Competition in Concentrated Markets” by Timothy F. Bresnahan and Peter C. Reiss

References

• “Of Unlimited Competition” by A.-Augustin Cournot, Chapter 8 of Researches into the Mathematical Principles of the Theory of Wealth (substitutes for Tirole’s “Traditional Cournot Analysis”)

• “Antitrust Evaluation of Horizontal Mergers” by Joseph Farrell and Carl Shapiro (substitutes for merger guidelines)

• “The Gains form Merger or Collusion in Product-Differentiated Industries” by Jonathan B. Baker and Timothy F. Bresnahan (complements Jaffe and Weyl)

Lecture 15

Required

1. Course note “Redistribution”

2. “Cardinal Utility in Welfare Economics and in the Theory of Risk-taking” by John C. Harsanyi

3. “The Elasticity of Taxable Income with Respect to Marginal Tax Rates” by Emmanuel Saez et al.

4. “Taxation and the Allocation of Talent” by Benjamin B. Lockwood et al.

References

• “Measuring Marginal Utility by Reactions to Risk” by William Vickrey (substitutes for Harsanyi)

• “Some Simplified Formulae for Optimal Income Taxation” by Avinash Dixit and Agnar Sandmo (substitutes for course note)

• “Using Elasticities to Derive Optimal Income Tax Rates” by Emmanuel Saez (substitutes for course note)

• Fairness versus Welfare by Louis Kaplow and Steve Shavell (substitutes for Harsanyi)

• “Inequality Among World Citizens” by Fran¸cois Bourguignon and Christian Morrisson

• “The Evolution of Top Incomes” by Thomas Piketty and Emmanuel Saez

• “De Gustibus non est Taxandum” by Benjamin Lockwood and Matthew C. Weinzierl

• “Taxing Leisure Complements” by Louis Kaplow

• “Labor Supply and Taxes” by Michael P. Keane (substitutes for Saez et al.)

• “The Case for Progressive Taxation” by Peter Diamond and Emmanuel Saez

• “Optimal Taxation in Theory and Practice” by Gregory N. Mankiw et al.

Lecture 16

Required

1. “Asymmetric Information Bargaining Problems with Many Agents” by George J. Mailath and Andrew Postlewaite

2. “Holdout in the Assembly of Complements” by Scott Duke Kominers and E. Glen Weyl

3. “When Does Majority Rule Supply Public Goods Efficiently?” by Ted C. Bergstrom

4. “Public-Good Provision in Large Economies” by Felix J. Bierbrauer and Martin F. Hellwig (Section 1)

References

• “Concordance Among Holdouts” by Scott Duke Kominers and E. Glen Weyl (substitutes for Kominers and Weyl)

• The Gridlock Economy by Michael Heller

• “The Pure Theory of Public Expenditure” by Paul A. Samuelson

• “Measuring the Compactness of Political Districting Plans” by Roland G. Fryer Jr. and Richard Holden (complements Bergstrom)

• “Storable Votes” by Alessandra Casella

• “Arrow’s Theorem and the Gibbard-Satterthwaite Theorem” by Philip J. Reny (substitutes for Bergstrom)

• “A Regression Discontinuity Test of Strategic Voting and Duverger’s Law” by Thomas Fujiwara

• Collective Choice and Social Welfare by Amartya K. Sen

Lecture 17: Quadratic Voting

Required

1. “Quadratic Vote Buying” by E. Glen Weyl

2. “Voting Squared” by Eric A. Posner and E. Glen Weyl

References

• “Quadratic Voting as Efficient Corporate Governance” by Eric A. Posner and E. Glen Weyl

• “A Solution to the Collective Action Problem in Corporate Reorganizations” by Eric A. Posner and E. Glen Weyl

• “Electoral Engineering” by Jacob K. Goeree and Jingjing Zhang (complements Weyl and Azevedo)

• Economists and Societies by Marion Fourcade

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