# Advanced Microeconomic Theory

3rd Edition## Geoffrey Jehle, Philip Reny

Dec 2010, Paperback, 672 pagesISBN: 9780273731917

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## Description

- Back Cover
- Table of Contents
- Reviews

‘Advanced Microeconomic Theory’ remains a rigorous, up-to-date standard in microeconomics, giving all the core mathematics and modern theory the advanced student must master. This student-friendly text, with its efficient theorem-proof organization, and many examples and exercises, is uniquely effective in advanced courses.

- Description
## Back Cover

- Table of Contents
- Reviews

The classic text in advanced microeconomic theory, revised and expanded.

‘Advanced Microeconomic Theory’ remains a rigorous, up-to-date standard in microeconomics, giving all the core mathematics and modern theory the advanced student must master.

Long known for careful development of complex theory, together with clear, patient explanation, this student-friendly text, with its efficient theorem-proof organization, and many examples and exercises, is uniquely effective in advanced courses.

New in this edition

- General equilibrium with contingent commodities
- Expanded treatment of social choice, with a simplified proof of Arrow’s theorem and complete, step-by-step development of the Gibbard-Satterthwaite theorem
- Extensive development of Bayesian games
- New section on efficient mechanism design in the quasi-linear utility, private values environment. The most complete and easy to follow presentation of any text.
- Over fifty new exercises.

Essential reading for students at Masters level, those beginning a Ph.D and advanced undergraduates. A book every professional economist wants in their collection.

- Description
- Back Cover
## Table of Contents

- Reviews

PREFACE

PART 1: ECONOMIC AGENTS

CHAPTER 1: CONSUMER THEORY

**1.1 Primitive Notions**

1.2 Preferences and Utility

1.2.1 Preference Relations

1.2.2 The Utility Function

**1.3 The Consumer's Problem**

**1.4 Indirect Utility and Expenditure**

1.4.1 The Indirect Utility Function

1.4.2 The Expenditure Function

1.4.3 Relations Between the Two

**1.5 Properties of Consumer Demand**

1.5.1 Relative Prices and Real Income

1.5.2 Income and Substitution Effects

1.5.3 Some Elasticity Relations

**1.6 Exercises**

CHAPTER 2: TOPICS IN CONSUMER THEORY

**2.1 Duality: A Closer Look**

2.1.1 Expenditure and Consumer Preferences

2.1.2 Convexity and Monotonicity

2.1.3 Indirect Utility and Consumer Preferences

**2.2 Integrability **

**2.3 Revealed Preference **

**2.4 Uncertainty **

2.4.1 Preferences

2.4.2 Von Neumann-Morgenstern Utility

2.4.3 Risk Aversion

**2.5 Exercises **

CHAPTER 3: THEORY OF THE FIRM

**3.1 Primitive Notions **

3.2 Production

3.2.1 Returns to Scale and Varying Proportions

**3.3 Cost **

**3.4 Duality in Production **

**3.5 The Competitive Firm**

3.5.1 Profit Maximisation

3.5.2 The Profit Function

**3.6 Exercises **

PART 2: MARKETS AND WELFARE

CHAPTER 4: PARTIAL EQUALIBRIUM

**4.1 Perfect Competition **

**4.2 Imperfect Competition **

4.2.1 Cournot Oligopoly

4.2.2 Bertrand Oligopoly

4.2.3 Monopolistic Competition

**4.3 Equilibrium and Welfare**

4.3.1 Price and Individual Welfare

4.3.2 Efficiency of the Competitive Outcome

4.3.3 Efficiency and Total Surplus Maximisation

**4.4 Exercises **

CHAPTER 5: GENERAL EQUALIBRIUM

**5.1 Equilibrium in Exchange **

**5.2 Equilibrium in Competitive Market Systems **

5.2.1 Existence of Equilibrium

5.2.2 Efficiency

**5.3 Equilibrium in Production **

5.3.1 Producers

5.3.2 Consumers

5.3.3 Equilibrium

5.3.4 Welfare

**5.4 Contingent Plans**

5.4.1 Time

5.4.2 Uncertainty

5.4.3 Walrasian Equilibrium with Contingent Commodities

**5.5 Core and Equilibria **

5.5.1 Replica Economies

**5.6 Exercises **

CHAPTER 6: SOCIAL CHOICE AND WELFARE

**6.1 The Nature of the Problem**

**6.2 Social Choice and Arrow's Theorem **

6.2.1 A Diagrammatic Proof

**6.3 Measurability, Comparability, and Some Possibilities**

6.3.1 The Rawlsian Form

6.3.2 The Utilitarian Form

6.3.3 Flexible Forms

**6.4 Justice **

6.5 Social Choice and the Gibbard-Satterthwaite Theorem

**6.6 Exercises **

PART 3: STRATEGIC BEHAVIOUR

CHAPTER 7: GAME THEORY

**7.1 Strategic Decision Making **

**7.2 Strategic Form Games **

7.2.1 Dominant Strategies

7.2.2 Nash Equilibrium

7.2.3 Incomplete Information

**7.3 Extensive Form Games **

7.3.1 Game Trees: A Diagrammatic Representation

7.3.2 An Informal Analysis of Take-Away

7.3.3 Extensive Form Game Strategies

7.3.4 Strategies and Payoffs

7.3.5 Games of Perfect Information and Backward Induction Strategies

7.3.6 Games of Imperfect Information and Subgame Perfect Equilibrium

7.3.7 Sequential Equilibrium

**7.4 Exercises **

CHAPTER 8: INFORMATION ECONOMICS

**8.1 Adverse Selection **

8.1.1 Information and the Efficiency of Market Outcomes

8.1.2 Signalling

8.1.3 Screening

**8.2 Moral Hazard and the Principal-Agent Problem **

8.2.1 Symmetric Information

8.2.2 Asymmetric Information

**8.3 Information and Market Performance **

8.4 Exercises

CHAPTER 9: AUCTIONS AND MECHANISM DESIGN

**9.1 The Four Standard Auctions **

**9.2 The Independent Private Values Model**

9.2.1 Bidding Behaviour in a First-Price, Sealed-Bid Auction

9.2.2 Bidding Behaviour in a Dutch Auction

9.2.3 Bidding Behaviour in a Second-Price, Sealed-Bid Auction

9.2.4 Bidding Behaviour in an English Auction

9.2.5 Revenue Comparisons

**9.3 The Revenue Equivalence Theorem **

9.3.1 Incentive-Compatible Direct Selling Mechanisms: A Characterisation

9.3.2 Efficiency

**9.4 Designing a Revenue Maximising Mechanism **

9.4.1 The Revelation Principle

9.4.2 Individual Rationality

9.4.3 An Optimal Selling Mechanism

9.4.4 A Closer Look at the Optimal Selling Mechanism

9.4.5 Efficiency, Symmetry, and Comparison to the Four Standard Auctions

**9.5 Designing Allocatively Efficient Mechanisms **

9.5.1 Quasi-Linear Utility and Private Values

9.5.2 Ex Post Pareto Efficiency

9.5.3 Direct Mechanisms, Incentive Comparability and the Revelation Principle

9.5.4 The Vickery-Clarke-Groves Mechanism

9.5.5 Achieving a Balanced Budget: Expected Externality Mechanisms

9.5.6 Property Rights, Outside Options, and Individual Rationality Contraints

9.5.7 The IR-VCG Mechanism: Sufficiency of Expected Surplus

**9.6 Exercises **

**MATHEMATICAL APPENDICES**

**CHAPTER A1: SETS AND MAPPINGS**

**A1.1 Elements of Logic **

A1.1.1 Necessity and Sufficiency

A1.1.2 Theorems and Proofs

**A1.2 Elements of Set Theory **

A1.2.1 Notation and Basic Concepts

A1.2.2 Convex Sets

A1.2.3 Relations and Functions

**A1.3 A Little Topology **

A1.3.1 Continuity

A1.3.2 Some Existence Theorems

**A1.4 Real-Valued Functions **

A1.4.1 Related Sets

A1.4.2 Concave Functions

A1.4.3 Quasiconcave Functions

A1.4.4 Convex and Quasiconvex Functions

**A1.5 Exercises **

CHAPTER A2: CALCULUS AND OPTIMISATION

A2.1 Calculus

A2.1.1 Functions of a Single Variable

A2.1.2 Functions of Several Variables

A2.1.3 Homogeneous Functions

**A2.2 Optimisation **

A2.2.1 Real-Valued Functions of Several Variables

A2.2.2 Second-Order Conditions

**A2.3 Constrained Optimisation **

A2.3.1 Equality Constraints

A2.3.2 Lagrange's Method

A2.3.3 Geometric Interpretation

A2.3.4 Second-Order Conditions

A2.3.5 Inequality Constraints

A2.3.6 Kuhn-Tucker Conditions

**A2.4 Optimality Theorems**

**A2.5 Separation Theorems **

**A2.6 Exercises **

LIST OF THEOREMS

LIST OF DEFINITIONS

HINTS AND ANSWERS

REFERENCES

INDEX

- Description
- Back Cover
- Table of Contents
## Reviews