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Individual Decision-Making | |
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Introduction to Part I | |
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Preference and Choice | |
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Introduction | |
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Preference Relations | |
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Choice Rules | |
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The Relationship between Preference Relations and Choice Rules | |
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Exercises | |
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Consumer Choice | |
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Introduction | |
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Commodities | |
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The Consumption Set | |
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Competitive Budgets | |
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Demand Functions and Comparartive Statics | |
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The Weak Axiom of Revealed Preference and the Law of Demand | |
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Exercises | |
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Classical Demand Theory | |
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Introduction | |
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Preference Relations: Basic Properties | |
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Preference and Utility | |
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The Utility Maximization Problem | |
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The Expenditure Minimization Problem | |
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Duality: A Mathematical Introduction | |
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Relationships between Demand, Indirect Utility, and Expenditure Functions | |
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Integrability | |
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Welfare Evaluation of Economic Changes | |
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The Strong Axiom of Revealed Preference | |
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Appendix: Continuity and Differentiability Properties of Walrasian Demand | |
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Exercises | |
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Aggregate Demand | |
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Introduction | |
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Aggregate Demand and Aggregate Wealth | |
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Aggregate Demand and the Weak Axiom | |
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Aggregate Demand and the Existence of a Representative Consumer | |
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Appendix: Regularizing Effects of Aggregation | |
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Exercises | |
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Production | |
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Introduction | |
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Production Sets | |
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Profit Maximization and Cost Minimization | |
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The Geometry of Cost and Supply in the Single Output Case | |
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Aggregation | |
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Efficient Production | |
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Remarks on the Objectives of the Firm | |
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Appendix: The Linear Activity Model | |
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Exercises | |
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Choice under Uncertainty | |
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Introduction | |
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Expected Utility Theory | |
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Money Lotteries and Risk Aversion | |
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Comparison of Payoff Distributions in Terms of Return and Risk | |
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State Dependent Utility | |
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Subjective Probability Theory | |
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Exercises | |
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Game Theory | |
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Introduction to Part II | |
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Basic Elements of Non-Cooperative Games | |
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Introduction | |
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What is a Game? | |
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The Extensive Form Representation of a Game | |
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Strategies and the Normal Form Representation of a Game | |
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Randomized Choices | |
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Exercises | |
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Simultaneous-Move Games | |
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Introduction | |
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Dominant and Dominated Strategies | |
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Rationalizable Strategies | |
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Nash Equilibrium | |
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Games of Incomplete Information: Bayesian Nash Equilibrium | |
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The Possibility of Mistakes: Trembling-Hand Perfection | |
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Appendix: Existence of Nash Equilibrium | |
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Exercises | |
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Dynamic Games | |
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Introduction | |
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Sequential Rationality, Backwards Induction, and Subgame Perfection | |
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Sequential Rationality and Out-of-Equilibrium Beliefs | |
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Reasonable Beliefs, Forward Induction, and Normal Form Refinements | |
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Finite and Infinite Horizon Bilateral Bargaining | |
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Extensive Form Trembling-Hand Perfection | |
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Exercises | |
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Market Equilibrium And Market Failure | |
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Introduction to Part III | |
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Competitive Markets | |
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Introduction | |
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Pareto Optimality and Competitive Equilibria | |
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Partial Equilibrium Competitive Analysis | |
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The Fundamental Welfare Theorems in a Partial Equilibrium Context | |
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Welfare Analysis in the Partial Equilibrium Model | |
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Free-Entry and Long-Run Competitive Equilibria | |
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Concluding Remarks on Partial Equilibrium Analysis | |
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Exercises | |
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Externalities and Public Goods | |
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Introduction | |
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A Simple Bilateral Externality | |
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Public Goods | |
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Multilateral Externalities | |
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Private Information and Second-Best Solutions | |
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Appendix: Non-Convexities and the Theory of Externalities | |
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Exercises | |
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Market Power | |
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Introduction | |
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Monopoly Pricing | |
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Static Models of Oligopoly | |
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Repeated Interaction | |
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Entry | |
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The Competitive Limit | |
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Strategic Precommitments to Affect Future Competition | |
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Infinitely Repeated Games and the Folk Theorem | |
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Strategic Entry Deterrence and Accommodation | |
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Exercises | |
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Adverse Selection, Signalling, and Screening | |
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Introduction | |
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Informational Asymmetries and Adverse Selection | |
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Signalling | |
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Screening | |
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Appendix: Reasonable-Beliefs Refinements in Signalling Games | |
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Exercises | |
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The Principal-Agent Problem | |
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Introduction | |
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Hidden Actions (Moral Hazard) | |
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Hidden Information (and Monopolistic Screening) | |
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Hidden Actions and Hidden Information: Hybrid Models | |
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Multiple Effort Levels in the Hidden Action Model | |
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A Formal Solution of the Principal-Agent Problem with Hidden Information | |
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Exercises | |
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General Equilibrium | |
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Introduction to Part IV | |
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General Equilibrium Theory: Some Examples | |
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Introduction | |
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Pure Exchange: The Edgeworth Box | |
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The One Consumer-One Producer Economy | |
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The 2x2 Production Model | |
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General versus Partial Equilibrium Theory | |
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Exercises | |
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Equilibrium and Its Basic Welfare Properties | |
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Introduction | |
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The Basic Model and Definitions | |
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The First Fundamental Theorem of Welfare Economics | |
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The Second Fundamental Theorem of Welfare Economics | |
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Pareto Optimality and Social Welfare Optima | |
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First-Order Conditions for Pareto Optimality | |
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Some Applications | |
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Appendix: Technical Properties of the Set of Feasible Allocations | |
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Exercises | |
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The Positive Theory of Equilibrium | |
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Introduction | |
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Equilibrium: Definitions and Basic Equations | |
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Existence of Walrasian Equilibrium | |
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Local Uniqueness and the Index Theorem | |
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Anything Goes: The Sonnenschein-Mantel-Debreu Theorem | |
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Uniqueness of Equilibria | |
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Comparative Statics Analysis | |
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Tatonnement Stability | |
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Large Economies and Non-Convexities | |
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Characterizing Equilibrium through Welfare Equations | |
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A General Approach to the Existence of Walrasian Equilibrium | |
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Exercises | |
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Some Foundations for Competitive Equilibria | |
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Introduction | |
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Core and Equilibria | |
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Non-Cooperative Foundations of Walrasian Equilibria | |
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The Limits to Redistribution | |
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Equilibrium and the Marginal Productivity Principle | |
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Appendix: Cooperative Game Theory | |
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Exercises | |
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General Equilibrium under Uncertainty | |
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Introduction | |
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A Market Economy with Contingent Commodities: Description | |
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Arrow-Debreu Equilibrium | |
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Sequential Trade | |
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Asset Markets | |
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Incomplete Markets | |
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Firm Behavior in General Equilibrium Models under Uncertainty | |
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Imperfect Information | |
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Exercises | |
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Equilibrium and Time | |
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Introduction | |
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Intertemporal Utility | |
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Intertemporal Production and Efficiency | |
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Equilibrium: The One-Consumer Case | |
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Stationary Programs, Interest Rates, and Golden Rules | |
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Dynamics | |
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Equilibrium: Several Consumers | |
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Overlapping Generations | |
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Remarks on Non-Equilibrium Dynamics: Tatonnement and Learning | |
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Exercises | |
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Welfare Economics And Incentives | |
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Introduction to Part V | |
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Social Choice Theory | |
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Introduction | |
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A Special Case: Social Preferences over Two Alternatives | |
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The General Case: Arrow's Impossibility Theorem | |
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Some Possibility Results: Restricted Domains | |
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Social Choice Functions | |
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Exercises | |
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Elements of Welfare Economics and Axiomatic Bargaining | |
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Introduction | |
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Utility Possibility Sets | |
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Social Welfare Functions and Social Optima | |
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Invariance Properties of Social Welfare Functions | |
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The Axiomatic Bargaining Approach | |
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Coalitional Bargaining: The Shapley Value | |
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Exercises | |
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Incentives and Mechanism Design | |
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Introduction | |
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The Mechanism Design Problem | |
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Dominant Strategy Implementation | |
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Bayesian Implementation | |
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Participation Constraints | |
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Optimal Bayesian Mechanisms | |
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Implementation and Multiple Equilibria | |
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Implementation in Environments with Complete Information | |
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Exercises | |
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Mathematical Appendix | |
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Introduction | |
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Homogeneous Functions and Euler's Formula | |
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Concave and Quasiconcave Functions | |
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Matrices: Negative (Semi)Definiteness and Other Properties | |
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The Implicit Function Theorem | |
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Continuous Functions and Compact Sets | |
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Convex Sets and Separating Hyperplanes | |
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Correspondences | |
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Fixed Point Theorems | |
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Unconstrained Maximization | |
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Constrained Maximization | |
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The Envelope Theorem | |
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Linear Programming | |
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Dynamic Programming | |