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LUBS3005
Module Reading List

Advanced Microeconomics, 2021/22, Semester 2
Andrew Smith
A.S.J.Smith@its.leeds.ac.uk
Tutor information is taken from the Module Catalogue

Reading List for LUBS 3005: Advanced Microeconomics

Specific recommended readings will be given for individual lectures. An indicative set of readings for each lecture is set out below, though this might change slightly - however, it should be a very close guide to the final list so is useful if you want to get ahead with some of the material. 

The readings for each lecture are typically organised into essential readings and additional readings - it is intended that the additional readings are for your general interest and to expand your knowledge - and I do not expect you to read them all. 

In addition, separate readings will be sent out ahead of the classes later in the term in order to support you particularly with the maths aspects of the classes. 

It is assumed that students already understand consumer theory and the theory of the firm, as covered by an intermediate micro-economics text such as H R Varian: Intermediate microeconomics : a modern approach. Where aspects of consumer theory come up during the module, students faced with concepts they do not understand are advised to return to the relevant chapter of Varian or a similar text. Note that Varian, H.R. Intermediate Microeconomics with calculus 2014 edition is available online via the library catalogue.

The following textbook is useful to remind you of some of the core maths concepts (e.g. differentiation) - Essential mathematics for economic analysis, Sydsaeter, Knut (this is available electronically: https://www.vlebooks.com/Vleweb/Product/Index/864633?page=0)

Lecture 1: Introduction

Essential readings

Additional readings

  • For a simple treatment of Pareto improvements and efficiency see Varian, H,R. Intermediate Microeconomics: a modern approach, 2014 (9th edition), sections 1.9 and 1.10 (pages 15-17) - earlier editions of Varian will contain similar material. Note that Varian, H.R. Intermediate Microeconomics with calculus 2014 edition is available online via the library catalogue.  
  • No other additional readings: Lecture 1 is a general introduction to the organisation of the module and some of the key concepts that will be used later.

Lecture 2:  General Equilibrium and Pareto Efficiency

Essential readings

  • Per-Olov Johansson: An introduction to modern welfare economics (Cambridge University Press, 1991), Chapter 2  (this textbook is available online via the University library catalogue)
  • R.W. Boadway and Neil Bruce: Welfare economics (Basil Blackwell, 1984), Chapter 3 (pages 82-84) – this is a short discussion of the implications of the first and second welfare theorems Available electronically in OCR
  • As an alternative to Johansson, consider Varian, H,R. Intermediate Microeconomics: a modern approach, 2014 (9th edition), Chapters on Exchange and Production (32 and 33 in the 9th Edition) - earlier editions of Varian will contain similar material. Note that Varian, H.R. Intermediate Microeconomics with calculus 2014 edition is available online via the library catalogue.  

Additional readings

  • Blaug, M. (2007), ‘The Fundamental Theorems of Modern Welfare Economics, Historically Contemplated, History of political economy, 39 (2): 185-207.
  • R.W. Boadway and Neil Bruce: Welfare economics (Basil Blackwell, 1984), Chapter 3 (pages 61-84) – for those seeking a more advanced treatment and further detail (though note CICs are not on the syllabus and you might find them unhelpful) Available electronically in OCR
  • Hayek, F.A. (1945), ‘The Use of Knowledge in Society’, American economic review, volume XXXV, no.4, pp. 519-530.
  • Dasgupta, P., ‘Utilitarianism, Information and Rights’, in Utilitarianism and beyond , edited by Amartya Sen & Bernard Williams.
  • Arrow (1974). General Economic Equilibrium: Purpose, Analytic Techniques, Collective Choice American economic review, Vol. 64, No. 3 (Jun., 1974), pp. 253-272 (this is just the reference for the quote used earlier and I am not intending that you need to read it)
  • The following textbook is useful to remind you of some of the core maths concepts (e.g. differentiation) - Essential mathematics for economic analysis, Sydsaeter, Knut (this is available electronically https://www.vlebooks.com/Vleweb/Product/Index/864633?page=0). This will also be useful to help you with the maths in the classes
  • Relevant chapters of Varian, Intermediate Microeconomics may be useful to remind you of the core economic concepts – e.g. in the 2014 9th Edition, Chapter 4 reminds you about concepts such as MRS. Any version of Varian will be OK for this purpose. Note that Varian, H.R. Intermediate Microeconomics with calculus 2014 edition is available online via the library catalogue.

Lecture 3: Compensation tests

Essential readings

Additional readings

Explicit reference is made to compensation tests in appraisal guidelines:

Lecture 4: Social Welfare Functions 

Essential readings

Additional readings

  • Nyborg (2014) Project evaluation with democratic decision-making: What does cost–benefit analysis really measure? Ecological Economics
  • Nurmi and Ahthiainen (2018) Distributional Weights in Environmental Valuation and Cost-benefit Analysis: Theory and Practice. Ecological Economics

Lecture 5: Price Changes and Consumer Surplus

Essential readings

Additional readings

Lecture 6: Non-market valuation

Essential readings

Additional readings

Lecture 7: Applications of non-market valuation

Essential readings

  • Batley et al. (2019) New appraisal values of travel time saving and reliability in Great Britain. Transportation 
  • Robinson and Hammitt (2016) Valuing Reductions in Fatal Illness Risks: Implications of Recent Research, Heatlh Economics
  • Bishop et al. (2017) Putting a value on injuries to natural assets: The BP oil spill, Science 

Additional readings

Lecture 8: Market Failure, Externalities and Public Goods

Essential readings

  • Per-Olov Johansson: An introduction to modern welfare economics (Cambridge University Press, 1991). Chapter 5, Sections 5.3-5.4; Chapter 6, Sections 6.1-6.3 and Chapter 8 (Clarke-Groves and preference revelation)  

Additional readings

Lecture 9: Prospect Theory

Essential reading

Additional readings

Lecture 10: Auction Theory

Core theoretical readings

  • Main reference: Molho, I. (1997), The economics of information : lying and cheating in markets and organizations , Blackwell (Chapter 14, especially pages 206-220 and pages 223-224)  Available electronically in OCR
  • Cave and Williamson, 1995; in Bishop, Kay and Mayer, The regulatory challenge , Chapter 7 (pages 178-180 good on winner’s curse; more generally good as a broadcasting example) Available electronically in OCR
  • Varian, H,R. Intermediate Microeconomics: a modern approach, 2014 (9th edition), Chapter 18 (chapter numbers based on 9th edition) if you need a simpler treatment - earlier editions of Varian will contain similar material. Note that Varian, H.R. Intermediate Microeconomics with calculus 2014 edition is available online via the library catalogue  
  • For theory you could also dip into Thaler (1988) – see below.

You will need to be able to quote examples for any question on auction theory, so see also the readings below.

Empirical examples

This list was last updated on 09/02/2021