When microeconomics is not about shopping

I finished yesterday a 6-day course, with 6 hours per day (with two pauses per session) of online teaching, on Applied Microeconomics. It was physically exhausting but rewarding and fun. It is a graduate course I have been teaching for some years now, and in the recent past I have adapted it for a one week intensive experience in Cali (Colombia). But this time I couldn't go there, so we did it from home. Since it was with a small group of five Colombian students, it turned out to be a great experience for me, and I believe also for the students. Virtual courses, from my short experience, work well either if the group is small or if the material is very good. My undergraduate virtual course on Introductory Economics for political science students was good thanks to the CORE material, and this graduate course worked well because the group was small.The contents of the course have been evolving since I started teaching it more than 10 years ago. Now I concentrate the neoclassical models of consumption and production in the first of six chapters. The second is about welfare economics, the third is an introduction to game theory, the fourth about social choice and political economy, the fifth about organizations (this was new this time), and the sixth about behavioral economics. In exercises and examples in welfare economics and game theory, I also teach them the basic Industrial Organization models. Everything with empirical or overview papers presented by the students themselves. Some of them told me that they didn't expect microeconomics to be this. I think they were positively surprised to see empirical applications, discussions about inequality, organizational failures, bounded rationality or climate change and the pandemic. 

When microeconomics goes beyond supply and demand is really when students can enjoy it and see its relevance for today's human problems and challenges.The students were very active in the discussion linking organizational failures to the literature on multidimensional incentives. They gave very good examples from their experience in Colombia about incentives backfiring. The problem is not that incentives are not effective, but that they may be too effective. The examples they gave about a variety of organizations in their country (including the army) fit very well with the cases discussed in the paper by Garicano and Rayo that they had to read. They made additional contributions to the list of organizational failures of these authors, for example talking about toxic relationships inside organizations, and the difficulties of designing and planning for the very small firms that dominate the Colombian economy. For them, trial and error is of the essence.