Class 5: Advanced Microeconomics

September 23, 2016

Learn the functionality of the canonical social interaction model and examine a major topic in political economics – the tragedy of the commons.

SCEPA and INET are proud to present an online economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School. The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 05: Social Interactions (Part Β)

The fifth lecture begins with an analytical presentation of the canonical social interaction model. The model integrates social interaction into economics and answers the question of what would happen in a social coordination case, in which all people gathered together and decided what to do. The subject of what is the best response for each individual in a variety of cases is also examined. After the theoretical analysis, the lecture focuses on the mathematical framework of the model and an accurate graphical visualization is given by presenting on what extent the certain parameters can affect the model’s fluctuation. Through this approach, they are able to explain in which cases there is a strategic complementarity between agents and in which cases there is not. Prisoner’s dilemma is just a subset of this theory. In the last part of the class, the major topic of the Tragedy of Commons in Political Economy is discussed as an example that integrates this model into real life.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 05 Social Interaction (Part Β) | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016