Extended Outline

1. Monopoly

   1. Monopoly Problem

      • elasticity of demand, markup, price-cost margin, Lerner Index.

   2. Price Discrimination

      • first-/second-/third-degree price discrimination, nonlinear pricing, arbitrage, hidden information, commitment.

   3. Imperfect Market Competition

      • function, domain, range, one-to-one, onto.

2. Introduction to Game Theory

• 1. Illustration: Slide

3. Static Games and Nash Equilibrium

• 1. Normal-form Game

     • normal-form, players, strategies, payoff, strategy space, strategy profile, payoff function.

  2. Nash Equilibrium

     • best response, Nash equilibrium.

  3. Why and How Is Nash Equilibrium Reached?

     • rationality, focal point, self-enforcing agreement, repeated play, path dependence.

4. Static Oligopoly Models I

• 1. Hotelling Model of Spatial Competition

  2. Bertrand Model of Duopoly

     • Bertrand paradox.

  3. Cournot Model of Duopoly

5. Static Oligopoly Models II

• 1. Further Analysis on Cournot Model

  2. Bertrand Model with Product Differentiation

  3. Bertrand or Cournot?

6. Mixed Strategies and the Existence Theorem

• 1. Illustration: Slide

  2. Mixed Strategies

  3. Existence of Equilibrium

     • Kakutani's fixed point theorem, best response function.

7. Dynamic Games and Extensive-Form Representation

• 1. Illustration: Slide

  2. Extensive-Form Game

     • extensive-form, strategy, information set, perfect information game, imperfect information game.

8. Subgame Perfect Nash Equilibrium

• 1. Subgame Perfect Nash Equilibrium

     • subgame perfect, subgame perfect Nash equilibrium (SPNE).

  2. Stackelberg Model of Duopoly

9. Applications of Dynamic Games

• 1. Strategic Investment

     • strategic substitutes, strategic complements, fat-cat, lean and hungry, top dog, puppy-dog.

  2. Bargaining Model

10. Repeated Games

• 1. Finitely Repeated Games

     • stage game, finitely repeated game.

  2. Infinitely repeated Games

     • average payoff, infinitely repeated game, history, trigger strategy.

  3. Falk Theorem

     • feasible.

11. Static Games with Incomplete Information

• 1. Bayesian Games

     • nature, type.

  2. Cournot Game with Unknown Cost

  3. Bayesian Nash Equilibrium

     • strategy, belief, Bayes' rule, Bayesian Nash equilibrium.

  4. Revelation Principle

     • direct mechanism.

12. Dynamic Games with Incomplete Information

• 1. Perfect Bayesian Equilibrium

     • belief, sequentially rational, Bayes' rule, on the equilibrium path, off the equilibrium path, perfect Bayesian equilibrium (PBE).

13. Applications of Incomplete Information Games

• 1. Market for Lemon

  2. Signaling Games

  3. Cheap Talk Games

14. Bargaining Problems

• 1. Cooperative Games

     • cooperative game, coalitional game.

  2. Nash Bargaining Solution

     • bargaining problem, agreement, disagreement outcome, bargaining solution, Nash (bargaining) solution.

  3. Axiomatic Approach

     • independence of irrelevant alternatives (IIA).

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