Introduction / grand overview

This course is designed to provide a thorough understanding of core microeconomic theory. The course includes core analytical skills and delves into topics critical to firm strategy and optimal government policy design.

Professor Benjamin Shiller is an Associate Professor in the Department of Economics at Brandeis University. His research has been published in top academic journals and featured in notable press publications such as The Economist, VOX EU, The Atlantic, The Conversation, Forbes, The Guardian, and The Washington Post. His qualifications are available on his website.

The videos in collapsible sections (below) fully explain the core material. Students may also benefit from reading the material in textbook form. Several recommended textbooks are:

• "Microeconomics" (Pindyck and Rubinfeld)

•"Microeconomics" (Goolsbee, Levitt, and Syverson)

• [Free] "Principles of Microeconomics" (Taylor et. Al)

Unlike in a traditional classroom, with prerecorded videos you can rewind, fast forward, or watch at a different speed (e.g., 1.25 times as fast).

Partial equilibrium analyses, elasticities, price controls, taxes

Introduction / grand overview

Partial equilibrium, calculating welfare, elasticities.

Finding equilibrium, both graphically and analytically, under partial equilibrium analyses.

Shifts in vs. movement along demand curve.

Elasticity of demand. Using elasticities.

Inferring linear demand from elasticity of demand.

Price floors, price ceilings, quotas, and taxes. These videos explore the potentially unintended consequences of various government interventions graphically, and analyzes which party---consumer or firms---ends up bearing the implied costs of a tax.

This video explains consumer surplus and producer surplus, graphically.

This video explores the impacts of taxation, and who bears the brunt of taxes.

This section examines consumer and producer theory. After a short math review, this sequence explores models of consumer decisions (using indifference curve maps with budget lines), income and substitution effects, and firm cost minimization. It explains how consumer preferences imply demand curves, why upward sloping demand curves are theoretically feasible for a subset of inferior goods (Giffen goods), and how a firm's cost function can be found when firms can substitute one input for another in the production process. It also reviews important cost concepts, like marginal costs, economies of scale, learning by doing, etc.

In subsequent topics, calculus methods are used to maximize or minimize functions. This will be helpful, not only for maximizing a given agent's objectives, but also for predicting the actions of various economic agents. For example, to predict how breaking up a monopoly will impact market prices, we need to be able to predict how firms will behave in the new environment. We do so by finding the price for each firm that maximizes its profits, given the actions of other firms. Calculus skills are needed for such analyses.

This sequence explains the theory behind consumers' choices, how consumers maximize utility, and how this leads to a market demand function. These concepts are taught both graphically (with indifference curves and budget lines) and using calculus methods.

This video shows how one can derive a consumer's optimal consumption basket using calculus.

This sequence introduces the concepts of income and substitution effects, as well as related topics of inferior goods and Giffen goods.

Income and substitution effects, graphical analyses.

This sequence explores the theory of production, firm cost minimization both in the short and long run, and how to derive the firm's cost function which relates output to cost when using the efficient set of inputs.

This sequence introduces various cost concepts, such as economic vs. accounting costs, learning by doing, economies of scale/scope, marginal costs, average costs, and fixed vs. variable costs. It also explains how to determine if/when there are economies of scale.

This section examines firm strategies and the impact of market structure on outcomes of interest, often using game theory. Topics include (I) types of market structures: perfect competition, monopolistic competition, oligopoly, monopoly, and collusion, (II) price discrimination/targeted pricing, and (III) game theory: Nash equilibrium, payoff matrices, and mixed strategy Nash equilibria.

This sequence uses graphical analyses to explain the differences between perfect competition, monopolistic competition, and monopoly. It also explains market outcomes under perfect competition and monopolistic competition.

This sequence uses graphical theory and calculus to derive the profit-maximizing price for a monopoly firm, and the optimal wage for a monopsony firm.

This video explains the Lerner Index, and how it can be used to infer the marginal cost of a firm.

This sequence uses a variety of approaches to explain how and why firms might offer different prices to different consumers (or different per unit prices for varying package sizes) to extract a greater share of surplus as profits. Topics include: 1st-, 2nd-, and 3rd-degree price discrimination, which includes both direct price discrimination (in which consumers are explicitly offered different prices) and indirect price discrimination under which firms offer the same menu of products, but consumers end up paying different per unit prices based on the package size they select.

This video explains 1st-degree price discrimination, also known as personalized pricing.

This sequence explains two advanced forms of indirect (2nd-degree) price discrimination: bundling and two-part tariffs.

This sequence introduces the game theory concept of Nash Equilibrium to examine market outcomes when a small number of firms (e.g., 2) compete in a market. Outcomes can depend on a variety of assumptions, including whether firms decide the amount to produce (selling that quantity at the price determined by the market) or the price to set (selling whatever quantity is demanded at that price). This section analyzes oligopoly models in which firms choose quantity.

This sequence investigates outcomes in oligopoly markets when competing firms set prices, rather than quantities. The lectures describe the difference in outcomes when products produced by the firms are identical (classic Bertrand model) or differentiated.

This sequence discusses collusion and presents a game theory construct (payoff matrices) to analyze outcomes in a series of games, starting with the prisoner's dilemma. The last video introduces an advanced concept from game theory: mixed strategy equilibria.

Interest, discounting, and modeling preferences for risk / certainty.

This sequence explains the concept of time discounting, and explains how to find the present discounted value or net present value of a stream of payments/costs.

This video explains how to find the present discounted value of a stream of payments.

This sequence explains how we can model consumers' risks preferences. Specifically, it explains how the utility model can be used to understand and predict which alternative consumers will choose when the choices offer different expected incomes and income riskiness/variability.

This video explains the certainty equivalent and risk premium, and how to find each.

General equilibrium, efficiency and social welfare

This series explains general equilibrium, why it leads to different predictions than partial equilibrium even when we are only focused on a market for a single good, and how to find equilibrium with demand and supply linkages across markets.

This video explains how to find price and quantities in general equilibrium, mathematically.

This series explains the difference between social welfare and efficiency, why we focus on efficiency despite its limitations (allowing 'unfair' allocations). It also examines the conditions necessary for overall efficiency in the marketplace.

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