Spring 2005
Instructor: Yongmin Chen
Office: Econ 112
Tel. (303)492-8736; E-mail: Yongmin.Chen@colorado.edu
Office Hours:11:00-12:00 on Tuesdays and Thursdays.
If you need to talk to me at other times, you are also welcome.
Course Description:This is the second graduate course in microeconomic theory.It consists of two main parts.Part 1 is about noncooperative game theory.We shall study in this part the basic elements of games, static games of complete and incomplete information, and dynamic games of complete and incomplete information.This will lay down the foundation to our analysis of individual behavior and interactions in economic situations where there is strategic interdependence. In Part 2, we shall study market equilibrium and market imperfections.We shall start from the perfectly competitive market, and characterize its properties and welfare implications.The assumptions for the perfectly competitive market are then relaxed in several directions: the existence of externalities, the existence of market power, and the existence of imperfect information; and the market outcomes under each of these cases are analyzed.Applications of the theoretical developments will be discussed
Course Materials: The textbook is Microeconomic Theory, by Mas-Colell, Whinston, and Green. We intend to cover most materials in Parts II and III of the book.Some selected topics from other parts of the book may also be covered.
Grading: Grades are based on homework and class participation (10%), a midterm exam (40%); and a final exam (50%). You are encouraged to form study groups to discuss homework and lecture materials.Both exams will be in closed-book forms.
Problem Sets: There will be regular assignment of problem sets. Normally, you need to complete each problem set the following Tuesday from the time it is assigned and have it turned in to me.For each problem set, the TA will select randomly half of the students and grade their problem sets.A student’s performance on problem sets will be calculated based on his (her) problem sets that are actually graded.However, if a problem set is not turned in on time, this problem set will receive a score of zero.For every other week, the TA will hold a recitation in which the problem sets are discussed.Additional sessions can be added if there is such a need.
Lecture Topics: Below is a tentative plan for the lectures. Changes to the plan will be announced in class during the semester, and you are responsible for updating the information.
Topic 1Basics of Noncooperative Games
Readings: Ch.7.
Problem Set 1:
7.C.1, 7.D.1, 7.D.2, 7.E.1.
Topic 2Simultaneous-Move Games under Complete Information
Readings: Ch. 8: 8A-8D.
Problem Set 2: 8.B.1, 8.B.2, 8.B.6, 8.B.7, 8.D.2, 8.D.4, 8.D.5.
Topic 3Simultaneous-Move Games under Incomplete Information
Readings: Ch. 8: 8E-8F.
Problem Set 3: 8.D.6, 8.E.2, 8.E.3.
Topic 4Dynamic Games under Complete Information
Readings: Ch. 9: 9A-9B
Problem Set 4: 9.B.2, 9.B.9, 9.B.10, 9.B.11.
Topic 5Dynamic Games under Incomplete Information
Readings: Ch. 9: 9C-9D
Problem Set 5: 9.C.2, 9.C.7.
Topic 6Competitive Markets: Concepts and Partial Equilibrium Analysis
Readings: Ch. 10: 10A-10C.
Problem Set 6: 10.C.1, 10.C.2, 10.C.4, 10.C.9, 10.C.10.
Midterm Exam
Topic 7The Fundamental Welfare Theorems in A Partial Equilibrium Context and Long-Run Competitive Equilibrium
Readings: Ch. 10: 10D-10F.
Problem Set 7: 10.D.2, 10.D.4, 10.F.2, 10.F.6.
Topic 8Externalities and Public Goods
Readings: Ch. 11.
Problem Set 8: 11.B.3, 11.B.4, 11.B.5, 11.C.1, 11.D.1, 11.D.6.
Topic 9Market Power: Static Models of Monopoly and Oligopoly
Readings: Ch. 12: 12A-12C.
Problem Set 9: 12.B.4, 12.B.5, 12.B.9, 12.C.3, 12.C.9.
Topic 10Dynamic Models of Imperfect Competition and Entry
Readings: Ch. 12: 12D-12E.
Problem Set 10: 12.C.18, 12 D.2., 12 E.4., 12 E.7.
Topic 11Adverse Selection, Signaling, and Screening
Readings: Ch. 13
Problem Set 11:13.B.2, 13.B.4, 13.C.1, 13.C.5.
Final Exam
*Students with disabilities who may need academic
accommodations should
discuss options with me during the first two weeks of class.
*The University of Colorado Policy on Sexual Harassment applies to all
students, staff and faculty. Sexual harassment is unwelcome sexual
attention. It can involve intimidation, threats, coercion, or promises
or create an environment that is hostile or offensive. Any student, staff
or faculty member who believes s/he has been sexually harassed should contact
the Office of Sexual Harassment (OSH) at 303-492-2127 or the Office of
Judicial Affairs at 303-492-5550.