A microscopic theory is presented for the giant amplification from microcav
ities in the strong exciton-photon coupling regime, providing excellent agr
eement with recent angle-resolved pump-probe experiments. The analytical an
d numerical solutions give insight into the physics of the polariton parame
tric amplifier. The coherent gain, due to polariton four-wave-mixing, has a
threshold dependence on the pump power and is spectrally blueshifted from
the lower polariton energy. The gain shift does not depend on the power, bu
t on the unperturbed polariton linewidth.