Microeconomics 2

Started the new semester for Microeconomics 2 last week. It's supposed to be the second in a three-part series of microecon course for graduate students. As it turned out the syllabus I had prepared had many overlaps with that for Microeconomics 1 taught by my colleague, Arindra Zainal. So I made changes. The result is as follows:

Texts: Hal Varian (HV) and Andreu Mas-Colell et al. (MC)
Coverage: Markets (Perfect, Monopoly, and Oligopoly), Uncertaity, and Game Theory.
Outline: 1) Overview/review (HV 1,26,27; MC 1, Math App), 2) Perfect Competition (HV 13, MC 10), 3) Monopoly (HV 14, MC 12), 4) Oligopoly (HV 16, MC 12), 5) Uncertainty (HV 11, MC 6), and 6) Game Theory (HV 15, MC 7,8,9).

I know this is unusual. As some have said: when it comes to HV and MC, it's an "either-or" thing -- you can't use both at the same time. Let's see how it plays out.

Having done the changes, I guess I would also adjust my Microeconomics 3 course next semester as to stress more on General Equilibrium and Welfare Economics and less on Game Theory and Uncertainty.

Limits to Rationality

Inasmuch I hate Limits to Growth, this one I love: Limits to Rationality. Sharla Stewart writes very eloquently on Richard Thaler, an avant garde behavioral economist at Chicago. Stewart quotes Thaler:

“most economists recognize that some of the people are not fully rational some of the time, and some of the time that matters.”
“The combination of free entry, unfettered competition, and free choice seems hard to quarrel with, [h]owever, if participants are not well-informed or highly motivated, then maximizing choice may not lead to the best possible outcome.”

On traditionalists view that rationals cancel out irrationals,

Behavioralists disagree, arguing that bounded rationality does indeed bump the market’s invisible hand.

Of course, Gary Becker slightly resists:

“While I believe there’s value in some areas of psychology, the focus is different...” “We’re interested in how groups respond.”
"Division of labor strongly attenuates if not eliminates any effects caused by bounded rationality".

To which Thaler comments:

“Maybe Gary Becker sometimes confuses behavioral economics with psychology,” says Thaler. “Because behavioral economists think about markets all the time.”

And yes, don't forget Thaler-Sunstein good paper, Libertarian Paternalism.

Sorry

Another good thing about blogging is you don't get fine if you break your promises. One day you have lots of stories to share and the next day you lose all the excitement. Well, that's normal in blogospehere. And that happens to me. My apologies, I am no longer bloggery about the tour of disparity.

I was busy completing research reports.

And in the meantime, was also busy trying to understand this man and this man (in Bahasa). And the men are no blogging!

NR&Env Econ Course

I kicked-off a new course yesterday. It is called "Natural Resources and Environmental Economics". It is in introductory level. This is the description:

This course is a blend of two parts, namely Environmental Economics and Natural Resource Economics, with more emphasis toward the former. The purpose of the course is to provide an overview of the principles of economics used to analyze environmental and natural resource problems. As of completing the course, students are expected to be able to assess environmental and natural resource problems with economics point of view and offer policy recommendation accordingly.

The text is Tietenberg.

This is the outline:

1. Introduction (Tietenberg, Ch. 1,2,5,21,22,23,24 / Julian Simon vs. Paul Ehrlich – some clippings.) 2. Property Rights, Externalities, and Market Failure (Tietenberg, Ch. 4 / Coase, Ronald, 1960.Social Cost," JLE 3:1-44) 3. Cost - Benefit Analysis (Tietenberg, Ch. 3 / Harrison, D., Jr. and D.L. Rubinfeld. 1978. Hedonic Housing Prices and the Demand for Clean Air. JEEM 5:81-102 / Carson, R.T, R.C. Mitchell, M, Hanemann, R.J. Kopp, S.Presser, P.A. Rudd, 2003 / Contingent Valuation and Lost Passive Use: Damage from the Exxon Valdez Oil Spill. ERE 25: 257-286. 4. Natural Resource Economics (Tietenberg, Ch. 5-14 / F.W. Bell, 1986. Mitigating the Tragedy of the Commons. SEJ 52:653-664 / Solow, R.M., 1974. The Economics of Resources or the Resources of Economics? AER Papers and Proceedings 64:1-14. 5. Environmental Economics (Tietenberg, Ch. 15-20 / M. Cropper and W. Oates, "Environmental Economics: A Survey," JEL, June 1992 / Arrow, K.J., P. Dasgupta, L. Goulder, G. Daily, P. Ehrlich, G. Heal, S. Levin, K; G. Mäler, S. Schneider, D. Starrett, and B. Walker, 2004. Are We Consuming Too Much? JEP 18(3): 147-172.

Having had the experience in the other program, I really told the students that we would be learning economics. Then we would try apply it to the problems of NR and Env. They seemed surprised that I am critical to the Kyoto Protocol and I am a pro-growth-pro-env.

"Very Good News"...

... was the subject of a mail sent to me by the ever-inspiring John Braden. He wrote:

Dear Arianto:
Your dissertation was chosen as the most outstanding in our Department for 2004 and is being submitted to the AAEA national competition... Congratulations! I am honored to be associated with your work ...
John

to which I replied:

Dear John:

I am very grateful to receive this recognition. No doubt, I owe this to you. I don't think I could even graduate in time without your guidance. Thank you so much!

Arianto

Much to catch up

Or, I might hesitantly call it "a tour of income disparity". Yes, I am back from a long trip to Dakar, Senegal. On the way back, I stayed one night in Dubai. Dakar-Dubai, hence the disparity. So what's the tale? Will elaborate later on -- have to catch up on tons of works. My Bloglines is fed up -- can't wait for a weekend. (By the way, these interesting blogs have joined my feeds: Graycells, Footnotes and Mahalanobis in addition to the formerly listed Dan Drezner and Matt Yglesias -- later will add them all to the sidebar, too. Ugh, another thing that I should mention: this latest post by Aria is wonderful).