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Readings

Texts

Kreps, D. A Course in Microeconomic Theory. Princeton, N.J.: Princeton University, 1990, chaps. 5, 6, and 8.

Mas-Colell, A., M. Whinston, and J. Green. Microeconomic Theory. New York: Oxford University Press, 1995, chaps. 10, 11, 15, 16, 17, 18B, 20, parts A to G in 19, and parts A to G in 21.

Varian, H. Microeconomic Analysis. 3rd ed. New York: W.W. Norton, 1992, chaps. 17, 18, 19, 20, 21.2, 21.3, 23, 24, and section 5 in chap. 6. 

Required Readings

Dasgupta, P., and G. Heal. Economic Theory and Exhaustible Resources. Cambridge, Eng.: Cambridge University Press, 1979, chap. 3.

Diamond, P. "Consumption Externalities and Imperfect Corrective Pricing." Bell Journal of Economics and Management Science 4, no. 2 (Autumn 1973): 526-538.

Diamond, P. "Efficiency with Uncertain Supply." Review of Economic Studies 47, no. 4 (July 1980): 645-651.

Diamond, P. "The Role of a Stock Market in a General Equilibrium Model with Technological Uncertainty." American Economic Review 57, no. 4 (September 1967): 759-776. Reprinted in Uncertainty in Economics: Readings and Exercises. Edited by Peter A. Diamond and Michael Rothschild. Rev. ed. San Diego, Calif.: Academic Press, 1989.

Diamond, P., and D. McFadden. "Some Uses of the Expenditure Function in Public Finance." Journal of Public Economics 3, no. 1 (February 1974): 3-21.

Dixit, A., and M. Olson. "Does Voluntary Participation Undermine the Coase Theorem?" Journal of Public Economics 76, no. 3 (June 2000): 309-335.

Farrell, J. "Information and the Coase Theorem." Journal of Economic Perspectives 1, no. 2 (Fall 1987): 113-129.

Hirshleifer, J. "The Private and Social Value of Information and the Reward to Inventive Activity." American Economic Review 61, no. 4. (September 1971): 561-574. Reprinted in Uncertainty in Economics: Readings and Exercises. Edited by Peter A. Diamond and Michael Rothschild. Rev. ed. San Diego, Calif.: Academic Press, 1989.

Kaplow, L., and S. Shavell. "On the Superiority of Corrective Taxes to Quantity Regulation." Cambridge, Mass.: John M. Olin Center for Law, Economics, and Business, Harvard Law School, 1997. (Discussion Paper no. 215.)

Moss, W. "Some Uses of the Expenditure Function in Public Finance: A Comment." Journal of Public Economics 5, nos. 3-4 (April-May 1976): 373-379.

Suggested Readings

Acemoglu, D., and F. Zilibotti. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth." Journal of Political Economy 105, no. 4 (1997): 709-751.

Arrow, K. Social Choice and Individual Values. 2nd ed. New York: Wiley, 1963.

Arrow, K. "The Role of Securities in the Optimal Allocation of Risk- Bearing." Review of Economic Studies 31 (1963-1964): 91-96.

Arrow, K., and F. Hahn. General Competitive Analysis. San Francisco: Holden-Day, 1971.

Bisin, A. "General Equilibrium and Endogenously Incomplete Financial Markets." Journal of Economic Theory 82, no. 1 (1998): 19-45.

Blackorby, C. "Economic policy in a second-best environment." Canadian Journal of Economics 23, no. 4 (1990): 748-771.

Coase, R. "The Problem of Social Cost." Journal of Law and Economics 3, no. 1 (October 1960): 1-44.

Dasgupta, P., and G. Heal. Economic Theory and Exhaustible Resources. Cambridge, Eng.: Cambridge University Press, 1979, chaps. 4 and 6.

Debreu, G. Theory of Value: An Axiomatic Analysis of Economic Equilibrium. New York: Wiley, 1959, chap. 7, pp. 98-102. Reprinted in Uncertainty in Economics: Readings and Exercises. Edited by Peter A. Diamond and Michael Rothschild. Rev. ed. San Diego, Calif.: Academic Press, 1989.

Debreu, G. Theory of Value: An Axiomatic Analysis of Economic Equilibrium. New York: Wiley, 1959.

Debreu, G., and H. Scarf. "A Limit Theorem on the Core of an Economy." International Economic Review 4, no. 3. (September 1963): 235-246.

Geanakoplos, J. "An Introduction to General Equilibrium with Incomplete Asset Markets." Journal of Mathematical Economics 19, no. 1 (1990): 1-38.

Geanakoplos, J. Three Brief Proofs of Arrow's Impossibility Theorem. New Haven, CT: Cowles Foundation for Research in Economics, 1996. (Discussion paper no. 1123R.)

Green, J., and E. Sheshinski. "Direct vs. Indirect Remedies for Externalities." Journal of Political Economy 84, no. 4, pt. 1 (August 1976): 797-808.

Gul, F., and E. Stacchetti. "Walrasian Equilibrium with Gross Substitutes." Journal of Economic Theory 87, no. 1 (1999): 95-124.

Hart, O. "On the Optimality of Equilibrium When the Market Structure Is Incomplete." Journal of Economic Theory 11 (December 1975): 418-443.

Hildenbrand, W., and A. Kirman. Equilibrium Analysis. Amsterdam: Elsevier, 1988, chap. 1.

Hirshleifer, J., and J. G. Riley. The Analytics of Uncertainty and Information. Cambridge, Eng.: Cambridge University Press, 1992.

Laffont, J. J. Fundamentals of Public Economics.  Cambridge, Mass.: MIT Press, 1988, chap. 1.

Laffont, J. J. The Economics of Uncertainty and Information. 4th ed. Cambridge, Mass.: MIT Press, 1993.

Lipsey, R. G., and K. Lancaster. "The general theory of the second-best." Review of Economic Studies 24, no. 1 (1956): 11-32.

Loong, L. H., and R. Zeckhauser. "Pecuniary Externalities Do Matter When Contingent Claims Markets are Incomplete." Quarterly Journal of Economics 97, no. 1 (February 1982): 171-179.

Magill, Michael, and Martine Quinzii. Theory of Incomplete Markets. Cambridge, Mass.: MIT Press, 1996.

Makowski, L. "Perfect Competition, The Profit Criterion, and the Organization of Economic Activity. " Journal of Economic Theory 22 (1980): 222-242.

Malinvaud, E. "The Allocation of Small Risks in Large Markets." Journal of Economic Theory 4 (1972): 312-328.

Mas-Colell, A. The Theory of General Economic Equilibrium: A Differentiable Approach. Cambridge, Eng.: Cambridge University Press, 1985.

Sen, A. "Social Choice." In The New Palgrave: A Dictionary of Economics. Edited by John Eatwell, Murray Milgate, and Peter Newman. Vol. 4. London: Macmillan, 1987.

Sheshinski, E. Note on Atmosphere Externality and Corrective Taxes. Jerusalem: Center for Rationality and Interactive Decision Theory, Hebrew University, October 1995. (Discussion Paper no. 84.)

Stiglitz, J. "The Inefficiency of Stock Market Equilibrium." Review of Economic Studies 49, no. 2 (1982): 241-261.

Ubeda, L. "Condorcet Paradox and Arrow's Impossibility Theorem." Unpublished.

Weitzman, M. "Free Access vs. Private Ownership as Alternative Systems for Managing Common Property." Journal of Economic Theory 8, no. 2 (June 1974): 225-234.

Weitzman, M. "Prices vs. Quantities." Review of Economic Studies 41, no. 4 (October 1974): 477-492.