Open Questions in Microeconomics

As Schotter points out in the introduction to his book "Microeconomics: A Modern Approach", microeconomics is usually presented as settled knowledge, rather than as an evolving science. It's important to give students some idea that there are many open issues. Here's an attempt to list some of them:

  • Complex adaptive systems
    • How long does it take for markets to reach equilibrium?
    • What makes them diverge from equilibrium?
  • Speculation
    • To what extent is speculation a bad thing?
  • Behavioral economics
    • We know that people do not always behave rationally. They may even diverge systematically from rational behavior. The question is: what should we do about it?
    • Decisions under risk: can we improve outcomes?
  • Incentive design
    • What's the best way to incentivize Wall St? What about teachers?
  • How do we model knowledge in economics?
    • People spend much of their time trying to acquire information and knowledge, so some of the time they are making decisions with imperfect knowledge. What are the implications of that?
  • How should we design institutions to perform as we want?
    • When should we use contract? Markets? Regulations?
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