Advanced Microeconomics

Universidad Carlos III de Madrid

Course Description

  • Course Name

    Advanced Microeconomics

  • Host University

    Universidad Carlos III de Madrid

  • Location

    Madrid, Spain

  • Area of Study

    Business Administration, Economics, International Economics, Peace and Conflict Studies

  • Language Level

    Taught In English

  • Course Level Recommendations


    ISA offers course level recommendations in an effort to facilitate the determination of course levels by credential evaluators.We advice each institution to have their own credentials evaluator make the final decision regrading course levels.

    Hours & Credits

  • ECTS Credits

  • Recommended U.S. Semester Credits
  • Recommended U.S. Quarter Units
  • Overview

    The objective of this course is to provide the students with the concepts and economic models that
    allow them to understand the financial markets in an environment with uncertainty on the future states
    of nature. It also aims to evaluate the consequences of uncertainty on the welfare of the agents. At the
    end of the course the student will be able:
    a) To know the fundamentals of the competitive markets and the Welfare Theorems.
    b) To understand the basic ideas in an economy with uncertainty.
    c) To apply the principles learned in the course to understand their behavior in a framework with
    uncertainty and risk.
    d) To understand the functioning of sequential markets.
    e) To understand the implications of both complete and incomplete markets.
    f) To understand the instruments that allow agents to hedge risk and future uncertainty.
    Along the course the following skills will be required:
    a) To propose, analyze and solve formal models.
    b) To use the conclusions of a mathematical model to make a decision.
    c) To search for the pertinent literature and documents when facing an economic problem.
    d) To discriminate among the different pieces of information when solving a problem.
    e) To resolve complex problems.
    f) To be able to work in groups and share the different tasks among its members to achieve a
    common objective.
    After taking the course the student should have acquired:
    a) A critical perspective about the limitations and applicability of the economic models with time
    and uncertainty.
    b) A capacity to take an initiative to modify and adapt the existent models to a new situation.
    c) A collaborative aptitude within a team in order to obtain the information needed to achieve the
    final goal.
    The objective of this course is to provide the student with a formal introduction to market and sequential economics
    with uncertainty.
    The program has three parts:
    Part I: General Equilibrium and Welfare Economies: Pure exchange economies with perfect competition. Welfare
    Part II: Asset markets: Financial economies with two periods and uncertainty over the states of nature of the
    second period. Markets can be complete or incomplete. Equilibrium concepts for the asset market economy.
    Conditions of no-arbitrage.
    Part III: Risk and Uncertainty: Preferences over lotteries: The expected Utility Theorem. Applications. Risk
    attitudes: risk aversion and risk neutrality. Stochastic Dominance.
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    The methodology will include:
    (1) In the theoretical classes the professor will present the material. Students will receive class notes
    and sheets of exercise. The students will have access to text books required in the course.
    (2) Discussion of real life cases related to the program.
    (3) Resolution of exercises by the students. These exercises will be useful for the student to evaluate his
    knowledge and to acquire the necessary abilities of problem solving.
    (4) Correction of the exercises in class, discussion of the suggested problems and exchange of critical opinions
    among all participants in the class.
    The continuous evaluation system will be based in the following criteria:
    a) Participation in class. Mostly, this evaluation will consist on the student¿s class interventions
    (related with the contents taught).
    b) Resolution of (practical) exercises.
    c) Final exam: 60%. The final exam is written and evaluates the student's knowledge of the course material
    First attempt: The final grade is obtained using the continuous evaluation system. Extraordinary attempt: The final grade will be the maximum between the continuous evaluation and the grade obtained in the final exam. % end-of-term-examination: 60 % of continuous assessment (assigments, laboratory, practicals): 40

Course Disclaimer

Please note that there are no beginning level Spanish courses offered in this program.

Courses and course hours of instruction are subject to change.

Eligibility for courses may be subject to a placement exam and/or pre-requisites.

Credits earned vary according to the policies of the students' home institutions. According to ISA policy and possible visa requirements, students must maintain full-time enrollment status, as determined by their home institutions, for the duration of the program.

ECTS (European Credit Transfer and Accumulation System) credits are converted to semester credits/quarter units differently among U.S. universities. Students should confirm the conversion scale used at their home university when determining credit transfer.

Please reference fall and spring course lists as not all courses are taught during both semesters.

Availability of courses is based on enrollment numbers. All students should seek pre-approval for alternate courses in the event of last minute class cancellations

Please note that some courses with locals have recommended prerequisite courses. It is the student's responsibility to consult any recommended prerequisites prior to enrolling in their course.


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