Memorial University of Newfoundland ECON 3670 Applications of Choice Theory

1. Memorial University of NewfoundlandECON 3670Applications of Choice Theory Roberto Martinez-Espineira Lecture 0 - Meeting session ECON3670 Meeting session

2. Introduction • Outline description: • Readings: Textbook and additional readings • Assignments • Website • Email rmartinezesp@ • Office AA 3087 • The course ECON 3670- Intro meeting

3. Outline description • Books: • Economics Uncut: A Complete Guide to Life, Death and Misadventure. Edited by Simon W. Bowmaker, Edward Elgar, Cheltenham, 2006 ECON 3670- Intro meeting

4. Outline description • Books: • You are supposed to come to the class prepared, we will go fast through the models and use the class more for discussions • Exam questions could come from anywhere, … as well as “from nowhere” • There will be lots of choice but… • Doing the readings is essential! It will hopefully be fun too, and not too taxing • They will be compiled at the library (Course Resources) ECON 3670- Intro meeting

5. Outline description • Additional readings are from, among others: • The Economics of Sports, by Michael Leeds and Peter von Allmen, Addison Wesley, 2005. • Freakonomics A Rogue Economist Explores the Hidden Side of Everything. by Steven D. Levitt and Stephen J Dubner, William Morrow & Company, 2005 • Sex, Drugs & Economics - An Unconventional Intro to Economics. 1st Edition. Diane Coyle. Thomson South-western, 2004. • The Economics of Sport and Recreation by Chris Gratton and Peter Taylor. E&FN Spon, New York (2000) ECON 3670- Intro meeting

6. Outline description • Additional readings are from, among others: • Friedman, David D. (1997) Hidden Order: The Economics of Everyday Life • Landsburg. S. (1993) The Armchair Economist. • And different Economics journals… ECON 3670- Intro meeting

7. Outline description For help with some of the core microeconomic models and concepts used, you should consult: • Perloff, J. (2004) Microeconomics, Third Edition, Addison Wesley Longman, available in the reserve collection in the library, or any other good Intermediate Microeconomics book of your choice ECON 3670- Intro meeting

8. Outline description ECON 3670- Intro meeting

9. Outline description Website: • I will email you with the link • Easy to find from the MUN Economics website • (or Google!) ECON 3670- Intro meeting

10. Outline description How to find me: • Email rmartinezesp@ (only from your MUN account! Please write ECON 3670 somewhere in the subject line) • Office AA 3087 Office hours: TUE 9:30 to 12:30, WED 9:30 to 10:30, or by appointment ECON 3670- Intro meeting

11. The course Several subthemes focus on aspects of the economics of: • professional organized sport and of recreational sports • prostitution, dating, and marriage • crime, mainly in relation with the regulation of illegal drugs and the consumption of addictive goods • gambling and other addictive behavior associated with the consumption of leisure • the entertainment industry ECON 3670- Intro meeting

12. The course • We will challenge the conventional wisdom that these behaviors should only be studied by sociologists and psychologists • …or worse: advocacy researchers • We will try to stick as much as possible to a positive approach to investigating many controversial issues and policies, rather than normative approach ECON 3670- Intro meeting

13. The course • This course shows students how economics can be used as an aid in understanding almost every choice associate with human behavior • Microeconomics and its subspecialities will help us with that ECON 3670- Intro meeting

14. The course • We will avoid big technicalities and the most complex models • But you have to be able to extract from a paper the main ideas, to critically consider the main assumptions, and to identify the conclusions. • We will try to relate the materials in the readings to your knowledge of Economics from other courses • We will try to relate the materials in the readings to your upper year Economics courses such as Labour Economics, Microeconomics, Environmental Economics, or Industrial Organization. ECON 3670- Intro meeting

15. The course We will often ask ourselves the question: • How would an economist think about this issue? • What have economist done about this problem? • Which tools did they use and how? • Does this analysis relate to other more conventional Economics problems? • Basically: how do we extend the basic models of competitive markets? ECON 3670- Intro meeting

16. The course We will exploit the basic tools you acquired in your Introductory Micro course, such as: • Scarcity • Marginal analysis • Opportunity cost • Equilibrium • Pareto efficiency • Even price elasticity!!! ECON 3670- Intro meeting

17. The course With some perhaps new-to-you recurrent themes that will help us discuss issues while “thinking like economists”: • Externalities • Scarcity rents • Search/transaction costs • Effective prices • The prisoners’ dilemma game (and other basic game theory models) • Expected utility maximization • Signaling • Discounting • Coase’s Theorem ECON 3670- Intro meeting

18. The course • We will also learn how to interpret empirical analyses • How to read with a critical eye reports and summaries of empirical studies • Further. we will anticipate the kinds of issues empirical microeconomists must face when trying to collect data and conduct microeconometric studies ECON 3670- Intro meeting