TOPICS IN MICROECONOMICS - 2023/4
Module code: ECO3038
This module looks at developments in microeconomic theory in relation to the role of information in the economy. It presents models of the basic contract theory and asymmetric information (moral hazard and adverse selection) as well as some of the applications of these models (e.g., insurance, labour market contracts). The module builds on the knowledge and skills the students have acquired in Levels 4 and 5 in terms of microeconomic theory, mathematical tools (algebra, calculus, constrained and unconstrained optimisation) and econometrics.
NURMIKKO-METSOLA Sanna (Economics)
Number of Credits: 15
ECTS Credits: 7.5
Framework: FHEQ Level 6
JACs code: L120
Module cap (Maximum number of students): N/A
Overall student workload
Independent Learning Hours: 96
Lecture Hours: 22
Tutorial Hours: 5
Guided Learning: 27
Prerequisites / Co-requisites
Economics and Mathematics students: ECO2051 (Intermediate Microeconomics 2) is a pre-requisite for this module
Indicative content includes:
- Baseline principal-agent model
- Moral hazard and adverse selection models
- Applications (e.g. investment finance)
|Assessment type||Unit of assessment||Weighting|
|Online Scheduled Summative Class Test||CLASS TEST 1 Online Test within a 4hr window||10|
|School-timetabled exam/test||CLASS TEST 2 (1 HR)||20|
|Examination||EXAMINATION (120 MIN)||70|
The assessment strategy is designed to provide students with the opportunity to demonstrate their understanding of developments in the economics of asymmetric information. Students who complete the module successfully will have demonstrated an ability to answer analytical questions on economic problems involving incomplete information, using a mixture of maths, diagrams and written and verbal reasoning.
The summative assessment for this module consists of:
- Two class tests (10% and 20% of the final module mark, respectively)
- A final examination (70% of the final module mark)
Formative assessment and feedback
Students receive verbal feedback on questions asked during lectures and tutorials. Five tutorial problem sets (with solutions) are distributed during the module. After each class test, written feedback is provided, consisting of solution guidelines. The various forms of feedback will allow the students to identify their areas for improvement and encourage them to seek further feedback and support while taking responsibility of their own learning. Students wishing to obtain further individual feedback can attend the student consultation hours of the teaching staff. They will be able to post and answer other students’ questions on the Discussion Forum on SurreyLearn and will be encouraged to work in small groups to learn through discussion and exchange of ideas.
- To promote students' understanding of how standard economic models and results are altered by the introduction of asymmetric information.
- To help students appreciate how many real-world phenomena can be rationalised with the aid of asymmetric information models.
- To promote students' understanding of the value of empirical research that aims to test asymmetric information contract models.
- To provide students with tools that help them to analyse the impact of asymmetric information on efficiency and economic welfare.
|001||Be able to set out and explain the basics of the principal-agent problems.||KC|
|002||Be able to determine and discuss the welfare consequences of asymmetric information.||KC|
|003||Be able to explain how various real-world outcomes (such as insurance deductibles, warranties and performance pay) can be rationalised in a principal-agent setting, a skill applicable to various Economics related job roles.||KCPT|
|004||To have an in-depth knowledge and understanding of the extent to which empirical data supports the results generated by the theoretical models, this further supporting future employability.||KCPT|
C - Cognitive/analytical
K - Subject knowledge
T - Transferable skills
P - Professional/Practical skills
Methods of Teaching / Learning
The learning and teaching strategy is designed to provide the students with the opportunity to enhance their skills in economic thinking, specifically in the context of asymmetric information, as well as improve their written and verbal presentation. These are skills and abilities that they will benefit from in their future job roles.
The learning and teaching methods include:
- 2 hours of lectures x 11 weeks
- 1 hour of feedback sessions x 5 weeks
The lectures will introduce the students to the weekly topic and provide numerical examples and real-world applications of the theoretical model at hand. Students are encouraged to ask and answer questions to develop a deeper understanding of the material. The tutorials will focus on discussing a set of numerical and/or theoretical problems and applications that will be provided in advance of the session. Students are expected to solve the problems before attending the tutorial in order to be able to discuss the solutions as well as ask for clarifications where needed. Engaging with the various methods of teaching will enable the students to become experts in their own strengths and help them identify their areas for improvement which promotes their resourcefulness and resilience. Guided learning consists of reading empirical studies related to the theory discussed in the lectures so as to provide the students with the opportunity to form links between the theory and empirical research, an essential skill for an economist.
Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.
Upon accessing the reading list, please search for the module using the module code: ECO3038
The School of Economics is committed to developing graduates with strengths in Employability, Digital Capabilities, Global and Cultural Capabilities, Sustainability, and Resourcefulness and Resilience. This module is designed to allow students to develop knowledge, skills, and capabilities particularly in the following areas:
Employability: Students will acquire knowledge and skills relevant to being able to discuss, debate and write about the effects that asymmetric information has on efficiency and welfare across industries (e.g. investment finance, insurance).
Resourcefulness and resilience: The students will develop the ability to solve and analyse models in the context of asymmetric information. They will be encouraged to stretch their skills and abilities even further than they have needed to in previous microeconomic modules while developing effective learning strategies.
Programmes this module appears in
|Economics BSc (Hons)||1||Compulsory||A weighted aggregate mark of 40% is required to pass the module|
|Economics and Mathematics BSc (Hons)||1||Optional||A weighted aggregate mark of 40% is required to pass the module|
|Financial Mathematics BSc (Hons)||1||Optional||A weighted aggregate mark of 40% is required to pass the module|
Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2023/4 academic year.