Advanced Microeconomics II (2010)
Course number: ECO601E
Instructor: Yosuke Yasuda (yosuke.yasuda@gmail.com)
Term / Time: Spring 2nd / Tue (9:00 – 10:30) and Wed (9:00 – 10:30)
Course web: http://sites.google.com/site/yosukeyasuda/Home/teaching/micro10_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. Most of the topics covered in this course parallels to those of Game Theory (ECO290E), but are explained in much more rigorous way.
2. Course Outline
1. Monopoly: [NS] Ch14
2. Static games and Nash equilibrium: [G] Ch1.1 ; [NS] Ch8 3. Static oligopoly models 1: [G] Ch1.2; [NS] Ch.15
4. Static oligopoly models 1: [G] Ch1.2; [NS] Ch.15
5. Mixed strategies and existence theorem: [G] Ch.1.3; [NS] Ch8
6. Dynamic games and extensive‐form representation: [G] Ch.2.1., 2.2.A, 2.4; [NS] Ch8 7. Midterm exam: in class 90 minutes
8. Subgame perfect Nash equilibrium: [G] Ch.2.1.B; [NS] Ch.15 9. Applications of dynamic games: [G] Ch.2.1.D; [NS] Ch.15 10. Repeated games: [G] Ch.2.3; [NS] Ch.15
11. Static games with incomplete information: [G] Ch.3.1, 3.2, and 3.3; [NS] Ch.8 12. Dynamic games with incomplete information: [G] Ch.4.1; [NS] Ch.8
13. Applications of incomplete information games: [G] Ch.4.2 and 4.3; [NS] Ch.8 14. Bargaining problems
15. Final exam: in class 90 minutes
3. Grading
Course grade will be determined by a midterm exam (40%), and a final exam (40%).
4. Textbooks
There are two main textbooks 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 edition 2007
The following is an introductory microeconomics textbook whose second part contains a lot of intuitive discussion on the topics of our course.
David Kreps, Microeconomics for Managers, 2004
A useful textbook for game theoretical analyses on oligopoly markets is: Luis Cabral, Introduction to Industrial Organization, 2000
Those who look for more lucid treatment than the above textbooks may consult with the following authoritative sources. The former incorporates game theoretical perspectives into microeconomics in depth, and the latter is as standard textbook most widely used in Economics Ph.D. microeconomics courses.
David Kreps, A Course in Microeconomic Theory, 1990
Andreu Mas‐Colell, Michael Whinston and Jerry Green, Microeconomic Theory, 1995