Carnegie Mellon University

Topics in Economic Theory

Course Number: 47904

This is an advanced topics microeconomics course about information and learning, with a focus on markets for information and model misspecification. The course will be divided into two parts. In the first part, we will study the basic underpinnings of modeling information in economic decisions, including measuring the value of information and information design. We will use these frameworks to study markets for information, including how a platform prices and sells information in an online market, how to design rating systems to incentivize a firms to produce a high quality product, and how a firm provides personalized product recommendations to consumers. In the second part, we will study the foundations of learning in economic settings, with a focus on social learning and experimentation. We will use these models to study how model misspecification (i.e. a systematically incorrect, or misspecified, understanding of the world) impacts learning. Model misspecification can be used to capture many common behavioral biases, such as overconfidence, correlation neglect and the false consensus effect. We will explore how these different biases impact learning in a variety of economic settings, and connect recent theoretical advances to the empirical literature in economics and psychology documenting such biases. 

Degree: PhD
Concentration: Economics
Academic Year: 2019-2020
Semester(s): Mini 3
Required/Elective: Elective
Units: 6

Format

Lecture: 100min/wk and Recitation: 50min/wk