Advanced Microeconomics II (2011)
Course number: ECO601E
Instructor: Yosuke Yasuda ([email protected]) TA: Ryoko SUSUKIDA ([email protected])
Term / Time / Room: Spring 2nd / Wed 9:00‐12:10 / 5F
Course web: https://sites.google.com/site/yosukeyasuda/Home/teaching/micro11_2
1. Course Description
This is an advanced course in microeconomics, succeeding to Advanced Microeconomics I (ECO601E) in which we study individual economic decisions and their aggregate consequences under ideal situations. In this course, we extend our previous analyses to incorporate imperfectly competitive market structures, dynamic market competitions, and incomplete information. To this end, we study game theory, a collection of mathematical tools for analyzing strategically interdependent situations. Course grade will be determined by combining grades on three homework assignments (45%) and a final exam (55%). Each problem set will be distributed in class. You are encouraged to form study groups, but must write up solutions independently.
2. Course Outline
1. Monopoly: [NS] Ch14
2. Static games and Nash equilibrium: [G] Ch1.1 ; [NS] Ch8 3. Oligopoly models: [G] Ch1.2; [NS] Ch15
4. Mixed strategies: [G] Ch1.3; [NS] Ch8
TA: Review on static games: [G] Ch1; [NS] Ch8
5. Dynamic games and extensive‐form: [G] Ch2.1., 2.2.A, 2.4; [NS] Ch8 6. Subgame perfect Nash equilibrium: [G] Ch2.1.B; [NS] Ch15
7. Commitment: [G] Ch2.1.D; [NS] Ch15 8. Repeated games: [G] Ch2.3; [NS] Ch15
9. Static games with incomplete information: [G] Ch3.1, 3.2, and 3.3; [NS] Ch8 10. Applications of incomplete information games: [G] Ch4.2 and 4.3; [NS] Ch8 11. Dynamic games with incomplete information: [G] Ch4.1; [NS] Ch8
12. Economics of Information: [NS] Ch18; [JR] Ch8 13. Moral Hazard: [NS] Ch18; [JR] Ch8.2
14. Screening: [NS] Ch18; [JR] Ch8.1
TA: Review on economics of information 15. Bargaining problems
16. Final exam: in class 120 minutes
3. Textbooks
Advanced Microeconomics II does not use specific textbooks. Instead, I provide my own lecture notes, which is downloaded from my course website.
https://sites.google.com/site/yosukeyasuda/Home/teaching/micro11_2
There are three textbooks which you may find useful to complement my lecture notes. You are encouraged to purchase the first one ([G]); its level and coverage are most appropriate for this course.
[G] Robert Gibbons, Game Theory for Applied Economics, 1992
[NS] Walter Nicholson and Christopher Snyder, Microeconomic Theory: basic principles and extensions, 10th, 2007
[JR] Geoffrey Jehle and Philip Reny, Advanced Microeconomic Theory, 3rd, 2011 The copies of related chapters will be distributed in class.
A useful text at roughly the same level as Gibbons, but contains variety of examples, is:
Martin Osborne, An Introduction to Game Theory, 2004
The following introductory textbooks on game theory contain full of intuitive explanations:
Avinash Dixit, Susan Skeath, and David Reiley, Games of Strategy, 3rd, 2009 Joseph Harrington, Jr. Games, Strategies, and Decision Making, 2008
A useful and concise textbook for theoretical analyses on oligopoly markets is:
Luis Cabral, Introduction to Industrial Organization, 2000
Those of you interested in pursuing game theory further may consult the advanced and authoritative sources such as:
Drew Fudenberg and Jean Tirole, Game Theory, 1991 Roger Myerson, Game Theory, 1991
Martin Osborne and Ariel Rubinstein, A Course in Game Theory, 1994
(You can download it for free: http://theory.economics.utoronto.ca/books/)
