Course Meeting Times

Lectures: 2 sessions/week, 1.5 hours/session

Recitations: 1 session/week, 1.5 hours/session


The prerequisite for this course is 14.123 Microeconomic Theory III or MIT students can get permission of the instructor.

Homework and Exams

There will be a final exam that is closed book. There will be 4-5 homework sets, which are marked but do not directly count in the grade. As an empirical statement, note that YOU HAVE TO DO THE HOMEWORK TO DO WELL.


I will mainly follow the textbook by Mas-Colell, Whinston, and Green (MWG). I also provide supplementary readings from other books, but for the most part MWG will do. Bolton and Dewatripont’s book does provide more in-depth material; it is used in 14.281 Contract Economics, but many will find it useful also for this class. The book by Gollier is an excellent, in-depth treatment of decision making under uncertainty. It may well be worth your investment to buy the book for future reference. I have included in the reading list a few articles, either because they are classic, or because my lectures will make use of them.


Buy at Amazon Mas-Colell, Andreu, Michael D. Whinston, and Jerry R. Green. Microeconomic Theory. Oxford University Press, 1995. ISBN: 9780195073409.

Buy at Amazon Varian, Hal R. Microeconomic Analysis, Third Edition. W.W Norton & Company, 1992. ISBN: 9780393957358.

Buy at MIT Press Buy at Amazon Bolton, Patrick, and Mathias Dewatripont. Contract Theory. MIT Press, 2004. ISBN: 978026202576.

Buy at Amazon Hart, Oliver. Firms, Contracts, and Financial Structures. Clarendon Press, 1995. 9780198288817.

Buy at Amazon Milgrom, Paul. Putting Action Theory to Work. Cambridge University Press, 2004.  9780521536721.

Buy at MIT Press Buy at Amazon Gollier, Christian. The Economics of Risk and Time. The MIT Press, 2004. 9780262572248.

See the Readings section for the complete list of the readings used in the class.