Advanced Microeconomics II (2014-15)
Syllabus
Last Update: January 20, 2014
1. Important Announcement
There will be a final exam on Feb 3 (Tue), 13:00-16:00 at 5H.
There will be a midterm exam on Dec 22 (Mon), 10:00-11:30 at 5J.
2. Lecture Hours:
Instructor, Yosuke YASUDA (yosuke.yasuda<at>gmail.com)
Tuesdays 10:40-12:10; 13:20-14:50 Room 5J
3. Office Hours:
Tuesdays 15:00-16:00 or by appointment (Room C911)
TA: Yoko Oishi: by appointment (phd11108<at>grips.ac.jp)
4. Course Description
This is an advanced course in microeconomics, succeeding to Advanced Microeconomics I (ECO600E) in which we study individual economic decisions and their aggregate consequences under ideal situations. In this course, we extend our previous analyses to incorporate externalities, imperfectly competitive market structures, dynamic market competitions, incomplete information, and indivisible goods. To this end, we study game theory, a collection of mathematical tools for analyzing strategically interdependent situations, and economics of information. Many of the topics covered in this course are parallels to those of Game Theory (ECO290E), but are explained in much more rigorous way. Course grade will be determined by a midterm exam (33%) and a final exam (67%). Problem sets will be distributed, but not be graded.
5. Course Outline
Expected Utility Nov 25
Reading: Ken Binmore, Rational Decision, 2009. Chapter3
Reference: Laffont Chapter1
Risk Aversion Nov 25
Reading: Laffont Chapter2
Monopoly Dec 2
Static Games Dec 2
Exercise 1
Supplementary note: slide 1
Mixed Strategies Dec 9
Supplementary note: slide 2
Review of Final Exam (for Ad. Micro 1) Dec 9
Oligopoly Dec 16
Problem Set 1
Reading: Cabral, Chapter7
Reference: Bagwell and Wolinsky (2002)
Dynamic Games Dec 16
Exercise 2
Supplementary note: slide 3
Reading: Watson, Chapter15
Reference: Tadelis, Chapter8
Problem Set 1: Solution
Midterm Exam (90 minutes) Dec 22
It covers Lectures 1-6. (Lecture 7 is NOT covered.)
Repeated Games Jan 6
Supplementary note: slide 4
Reading: Kandori (2008)
Incomplete Information Games Jan 6
Reading: Gibbons, Chapter3.2.C
Exercise 3
Auction Theory Jan 13
Reading: Klemperer (2003)
Reference: Krishna, Auction Theory (2nd ed.), 2009
Dynamic Games with Incomplete Information Jan 13
Problem Sets 2+3
Reference: Gibbons (1997)
Social Choice Jan 20
Reading: Geanakoplos (2005)
Mechanism Design Jan 20
Problem Sets 2+3: Solution
Reading: Tadelis, Chapter14
Final Exam (180 minutes) Feb 3
6. Assignments
Exercise and Problem Sets (uploaded day)
Exercise 1 : Q
Problem Set 1 : Q
Exercise 2 : Q
Problem Set 2+3: Q
Exercise 3 : Q
7. Past Exams
You can download the past exams below.
2013-14: Midterm; Final
2013: Final
2012: Final
2011: Final
2010: Midterm; Final
2009: Final
2008: Final
8. Textbooks
Advanced Microeconomics (I and II) does not use specific textbooks. Instead, I provide my own lecture slides, which are downloaded from above course outline. There are three textbooks which you may find useful to complement my lecture notes. You are encouraged to purchase the second ([NS]), since it will serve as the main textbook for Advanced Microeconomics III and IV. For the first one ([JR]), the copies of related chapters will be distributed in class.
[JR] Geoffrey Jehle and Philip Reny, Advanced Microeconomic Theory, 3rd edition, 2011.
[NS] Walter Nicholson and Christopher Snyder, Microeconomic Theory: Basic Principles and Extensions, 10th edition, 2007
[G] Robert Gibbons, Game Theory for Applied Economists, 1992
Those of you look for more lucid treatment than the above textbooks may consult with the following authoritative sources. The former is most widely used for microeconomics courses for economics Ph.D. students. The latter is more accessible and contains recently developed topics.
Andreu Mas-Colell, Michael Whinston and Jerry Green, Microeconomic Theory, 1995
John Riley, Essential Microeconomics, 2012
A classic and rigorous textbook for information economics is:
Jean-Jacques Laffont, The Economics of Uncertainty and Information, 1991
For introduction to game theory, the following books are recommended:
Avinash Dixit, Susan Skeath, and David Reiley, Games and Strategies, 3rd, 2009
Joel Watson, Strategy, 3rd, 2013
Detailed textbooks at roughly the same level as Gibbons are:
Martin Osborne, An Introduction to Game Theory, 2004
Steven Tadelis, Game Theory: An Introduction, 2012
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 from this website)
A useful textbook for game theoretical analyses on oligopoly markets is:
Luis Cabral, Introduction to Industrial Organization, 2000
6. Related Materials
Bagwell, Kyle and Asher Wolinsky (2002), "Game Theory and Industrial Organization," A chapter in Handbook of Game Theory with Economic Applications. SSRN
Geanakoplos, John (2005), "Three brief proofs of Arrow’s Impossibility Theorem.," Economic Theory, 26: 211–215.
Gibbons, Robert (1997), "An Introduction to Applicable Game Theory," Journal of Economic Perspectives, 11: 127-149. JSTOR
Kandori, Michihiro "Repeated Game" in The New Palgrave Dictionary of Economics, 2nd edition, 2008.
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