Contents

Part I. Equilibrium, efficiency, and asymmetric information: 1. Asymmetric information; 2. Taxi!; 3. Acid rain; 4. Efficiency; 5. Equilibrium; 6. The prisoner’s dilemma game; 7. Repetition and equilibrium;

Part II. Basic Models and Tools: 8. Maximizing a Quadratic; 9. Overview of calculus; 10. Lagrangian multipliers; 11. The composite commodity model; 12. Quasi-linear preferences; 13. Decision making under uncertainty; 14. Insurance;

Part III. Hidden Action: 15. Resource allocation; 16. Marketable pollution rights; 17. Incentive regulation of the telecommunications industry; 18. The savings and loan debacle; 19. Personal bankruptcy; 20. Mandatory retirement; 21. Tenure and the performance of professors; 22. Pay and performance in US public schools; 23. Moral hazard and insurance;

Part IV. Corporate Governance: 24. A brief tour of several countries; 25. Partnerships; 26. The owner-employee relationship; 27. The owner-manager relationship in practice; 28. Agency theory;

Part V. Hidden Characteristics: 29. Price discrimination; 30. Two-person exchange; 31. The used car market; 32. Credit rationing; 33. Bundling and product quality; 34. Job market signaling; 35. Competitive insurance markets;

part VI. Auctions: 36. Introduction; 37. The Vickrey auction; 38. Four basic auction mechanisms; 39. Revenue equivalence; 40. Applications of the revenue equivalence theorem; 41. Interdependent values;

Part VII. Voting and Preference Revelation: 42. Voting schemes; 43. Preference revelation in general; 44. General proof of the Gibbard-Satterthwaite theorem; 45. The revelation principle;

Part VIII. Public Goods and Preference Revelation: 46. The economic model; 47. The pivotal mechanism; 48. Groves mechanisms; 49. Efficiency and incentive compatibility;

Part IX. Matching: 50. Students and advisors; 51. College admissions; 52. Hospitals and doctors; 53. Allocating dormitory rooms; 54. Kidney transplants;

Part X. General Competitive Equilibrium: 55. Competition, property rights, and prosperity; 56. The Arrow-Debreu economy; 57. Non-convex economies; 58. Efficiency and incentive compatibility; 59. Common property resources.