Summary of curriculum - revised version for this semester

Here is the revised list clarifying this semester's curriculum. If there are any questions, please leave them in the comments section below so we can respond to everyone :)

Slides from lecture 13

The slides are here

Correction to exam-solution covered in lecture 13

The solution steps I followed were to

1. Identify optimal response for agent as a function of w and b (with p1 and p2 in general form)
2. Calculate optimal effort using the solution and adding in that p1=0.5 and p2=0.5 - This gave the answer to question 1 in the exam question
3. Calculate the optimal b from the firm's profit maximization Lagrangian. In this problem, as in the first, it makes sense to do this "generally" by employing p1 and p2. I did not do this consistently in the solution I wrote on the blackboard in class. Instead, I sometimes wrote in the optimal effort given that  p1=0.5, at other times using p1 and p2 in symbolic form. The error was pointed out by a student after class: This will give us the right answer to question 2, but this solution is only valid for p1=p2=0.5. In the second part of the exam, when examining how the optimal b is altered with changes in the value of p1, the equation I derived in problem 2 would not give the right answer.

To make sure you have the right expressions, I ran the exam through Mathematica - the full set of expressions and solutions for different values of p1 is given in the below screenshot. The general solution follows the intuition I gave when I solved the optimal b for values p1=p2=0.5: Give the agent the full marginal product of his or her effort, and suck out the "extra utility" this gives the agent (relative to the outside option) with the fixed (and negative) part of the wage. 

Here are what I (hope) are the correct solutions ;)
Let me know in the comments if anything is unclear or confusing:

Answer to question on empirical methods

In today’s lecture some students asked whether you could be given a question where you are asked to formulate an estimation equation for some kind of empirical problem (I think I did this mostly for DiD during the lectures). The answer is, yes, you might get such a problem on the exam.

Seminar 6 - suggested solution

Here is a link to the suggested solution to part 2 by group B.
See you at the last seminar tomorrow (15/11)!

Lecture 12

The slides from the first part of lecture 12 can be found here

The slides on Blanchard's article (which we didn't completely finish with) will follow after lecture 13.

Info about lecture 13

The last lecture is coming up. Depending on how long it takes to cover the chapter on institutions, part of the lecture will go through selected parts of last year's exam. The problem set for this and earlier exams can be found here. Last year's exam is this one.