Microeconomics is a broad field that encompasses several topics, from applied to theoretical.
A thesis in microeconomics can cover topics of direct applicability, such as an analysis of prices for specific goods or commodities, as well as policy analyses aimed at evaluating possible governmental actions, to purely theoretical research investigating the nature of human behavior.
A list of possible topics for theses within Microeconomics include:
1. Theoretical or Applied Game Theory and Economics of Information
2. Welfare economics and social choice
3. Behavioural and Experimental Economics
4. Energy-, Environmental or Resource Economics
5. Economic Valuation
6. Topics in Health Economics
Theoretical or Applied Game Theory and Economics of Information
A project on game theory can have both a theoretical and an applied focus.
In the theoretical part of the topic, it is for example possible to analyze and discuss a theoretical model and its possible extension, to compare different models and their implications, or to modify or extend a model.
In the applied part of this subject one common approach is to try to understand or describe observed politics and economic behavior in a game theoretic or informational economics setting. One could for example gain knowledge of a given area or problem observed in real life and (depending on the subject) either analyze implicit contractual conditions or analyze the problem in light of the theoretical knowledge of the underlying ’game’.
Possible supervisors on these topics include: Associate Professor Sibilla Di Guida, Professor MSO Birgitte Sloth, Professor MSO Peter Sudholter, Assistant Professor Ryan Tierney, Assistant Professor Huanren Zhang.
Examples of potential topics within this subject:
1. Implementation of auctions in practice. Why is a specific type of auction used in a given area etc.
2. Contract theory. How do contract theory and the involved problems regarding adverse selection and moral hazard change if the principal can draw on more than one agent? Uncovering obvious moral hazard or adverse selection problems related to various salary types in business.
3. Matching and market design. E.g. matching schools and pupils, patients and donors, or creating a market for organ donation.
4. Cost sharing. How should the cost of producing a good be divided among those who demand it?
5. Solutions to Bankruptcy problems. When a firm goes bankrupt, the value of the firm must be divided among the creditors. How should this be done?
6. Airport/highway problems. Different airlines (highway users) have different needs, so how should the cost of building or maintaining a landing strip (highway) be shared between the users?
7. Queueing problems. E.g.: If users to be served choose themselves (strategically) when to line up for service, how does the choice of queue discipline matter for average waiting time, how the queue evolves, etc.?
8. Bargaining problems. The analysis of problems where negotiations are involved, for example over wages, prices of commodities etc.
9. Multi-personal decision problems. How to derive solutions for cooperative decision problems when it depends on a multi-personal strategic interaction.
10. Trade, Market Structure and Competition. How firms are affected by the structure of the market and by the type and behavior of the competitors (national, international, large, local, …). E.g., How will the Danish brewery market develop in the future, given that there are many small players and few larger ones as well as several foreign competitors?
Literature:
Relevant textbooks (depending on topic):
• Dixit, Skeath and Reiley: Games of Strategy. Norton.
• Osborne and Rubinstein: A course in Game Theory. MIT Press.
• Maschler, Solan, and Zamir: Game Theory. Cambridge University Press.
• Fudenberg and Tirole: Game Theory MIT Press
• Gibbons: A primer in Game Theory
• Myerson: Game Theory. Analysis of Conflict. Harvard University Press
• Journal articles related to the chosen subject.
Welfare economics and social choice
A project based on welfare economics can focus on issues such as welfare, inequality and poverty. The project can be theoretical or empirical.
Possible supervisors on these topics include: Professor MSO Birgitte Sloth, Assistant Professor Ryan Tierney, Associate Professor Rafael Treibich, Assistant Professor Huanren Zhang.
Examples of potential topics within this subject:
1. How to measure inequality? Inequality is pervasive in many countries in the world. It is therefore essential to understand how to measure it properly, so as to help reducing it efficiently. This may be difficult in particular when inequality consists of several dimensions (such as health, income, education,…) . The project would consist in reviewing and discussing the definitions of various measures of inequality. Possibly with a specific use as illustration.
2. What is poverty? Should we define poverty in absolute or relative terms? When is someone poor in Denmark? Should it be the same as for developing countries? In order to understand poverty, it is important to define a precise and ethically appealing way of measuring poverty. The project would consist in reviewing these measures and applying them to various countries as an illustration.
3. Welfare. Economists often refer to “social welfare” when they want to talk about the collective good. But, what do we mean exactly by social welfare, and how should it be defined? This question is very important as different definitions of social welfare might lead to different policies or benefit some specific groups in society. The objective is therefore to understand how to measure social welfare so that everyone is treated in a fair and transparent way.
4. Voting. Social choice is about how to aggregate individual preferences into a collective decision. E.g. How can we aggregate individual preferences over different alternatives into a social preference? What is the advantage and disadvantage of different voting procedures? What is the consequence of Arrow's impossibility theorem?
Literature:
Relevant textbooks (depending on topic):
• Herve Moulin, Axioms of cooperative decision making. Cambridge University Press, 1988
• Young, H. Peyton. Equity: in theory and practice. Princeton University Press, 1995.
• Börgers, Christoph. Mathematics of social choice: voting, compensation, and division. AMC 10 (2009): 12.
• Lambert, Peter. The distribution and redistribution of income. Manchester University Press, 2001.
Behavioural and Experimental Economics
Behavioral Economics focuses on the process of decision making starting from the assumption that decision makers are not perfect utility maximizers. Behavioral game theory relaxes the assumption of perfect rationality and studies human behavior incorporating psychological and behavioral components, such as limited self-control, other-regarding preferences (like altruism, envy, preference for fairness, …), limited computational capacities (people are unable to find the optimal course of action), emotions, biases, …
Topics in behavioral economics might focus on individual behavior, but also on policy implications, and consumer behavior (and much more). Theses in Behavioral Economics can be theoretical (modeling based or review of the literature) or based on data collected by the students (through a survey or an experiment).
Possible supervisors on these topics include: Associate Professor Sibilla Di Guida, Assistant Professor Huanren Zhang.
Examples of potential topics within this subject:
1. Nudging. How to induce people to make better decisions? E.g., how to have healthier habits (eating, exercising, smoking)? How to increase sales on certain products using nudging? How to induce people eating at a canteen to improve their choice of food, keeping their satisfaction unchanged?
2. Gender biases. Are employers gender biased? How to test for this and reduce the bias?
3. Surplus allocation. When a team collaborates and creates surplus, how does it divide it across its members? How to affect the allocation of surplus?
4. Cooperation. Is it possible to induce people to behave more cooperatively, so as to increase the productivity of society?
5. Persuasion and influence: How can we use principles of behavioral economics to better persuade and influence other people?
6. Decision under risk and uncertainty: How to make people aware of their biases in risky decision making? How to help people make better decisions under risks and uncertainties?
7. Experimental economics. Taking previous studies as starting point or by carrying out your own experiment, individual behaviour in a given economic context is investigated.
Literature:
• Wilkonson, N. and Klaes, M.: An Introduction to Behavioral Economics. Palgrave MacMillan.
Energy and Environmental Economics
Energy and environmental economics originate theoretically in the externality problem and the involved loss of welfare. To avoid or limit such loss of welfare the government may introduce various forms of market regulation (taxes, standards, voluntary agreements, etc.) or public procurement.
Possible supervisors on these topics include: Professor MSO Birgitte Sloth, Assistant Professor Ryan Tierney.
Examples of potential topics within this subject:
1. Optimal regulation. How to best correct for the market failure through regulation in different markets. Regulation of natural monopolies. Regulation with asymmetric information (where the regulator does not know, e.g., firms’ costs).
2. Enforcement. How can a regulator (principal) ensure that the firms (agents) comply with regulation.
3. Environmental regulation and cost-effectiveness nationally and/or globally. How to assess the economic impact of market interventions.
Literature:
• Perman, Ma, McGilvray, Common. Natural resource and environmental economics. Pearson.
• Field & Field. Environmental Economics: An Introduction. McGrawHill Education.
• Laffont and Tirole: A theory of Incentives in Procurement and Regulation, MIT Press
Economic Valuation
Economic evaluation is an important element in a rational decision-making process about prioritizing resources. According to economic theory the individual utility can be measured as willingness-to-pay which is reflected in the price of the good. In case of market failures, the price of the good does not reflect the true value of the good anymore and in such situations (and in situations where a market does not exist) alternative methods must be used to elicit the preferences. These methods are traditionally split op into two categories dependent on whether the preferences are elicited directly or indirectly.
Possible supervisors on these topics include:Professor Kjeld Møller Pedersen, Assistant Professor Huanren Zhang.
Examples of potential topics within this subject:
1. Willingness-to-pay for a health (QALY): Methodological and theoretical issues
2. Methodological challenges to stated preference valuation
3. Theoretical foundations of economic valuation. What makes a measure a “good measure”?
4. Valuation of life. Valuation of travel time. Valuation of costs and benefits in the future.
Literature:
• Bateman, I. J., Carson, R. T., Day, B., Hanemann, M., Hanley, N., Hett, T., ... & Pearce, D. W. (2002). Economic valuation with stated preference techniques: a manual. Economic valuation with stated preference techniques: a manual.
• Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the economic evaluation of health care programmes. Oxford University Press.
Topics in Health Economics
Health care makes up a significant part of the expenditures and plays a central role in the Welfare State. Technological development, demographic changes and expectations of the population are all part of the pressure on the health care system. Health economics applies economic theory and methods to analyse problems that originate in these circumstances. In this way, health economics can illustrate the consequences of alternative solutions to support decision makers on national, regional and local levels.
Possible supervisors on these topics include: Associate Professor Christian Kronborg, Professor Kjeld Møller Pedersen.
Examples of relevant topics within this subject:
1. Organization of general practitioners in Denmark
2. Public health care or private health insurance
3. Control of incentives in public healthcare
4. User fees and access to health care services
5. Prioritization in health care
Literature:
Morris S, Devlin N, Parkin. Economic Analysis in Health Care. Wiley.
Jones, A. M., Rice, N., d'Uva, T. B., & Balia, S. (2013). Applied health economics. Routledge.