Economics 742: Introduction Organization, fall 2009


Instructor: Jeremy Sandford

Office hours: by appointment
Lecture: MW 130pm-2:45pm, 314 B&E

syllabus     reading list from last year    last year's web site

Required text: Mas-Collel, Whinston, and GreenMicroeconomic Theory, Oxford University Press

Dilbert.com

Problem set 1, due 9/16/09
Problem set 2, due 9/30/09
Problem set 3, due 10/14/09
Problem set 4, due 10/28/09
Problem set 5, due 11/18/09


Schedule


Wednesday, August 26: game theory foundations: normal form games
reading: MWG, chapter 7

Monday, August 31: extensive form games
reading: MWG, chapter 7

Wednesday, September 2: Solution concepts I: rationalizability
reading: MWG, chapter 8

Monday, September 7: No class, Labor Day

Wednesday, September 9: Solution concepts II: Nash equilibrium
Problem set 1
reading: MWG, chapter 8

Monday, September 14: equilibrium selection, solving extensive form games (subgame perfect equilibrium)
reading: MWG, chapters 8-9

Wednesday, September 16: solving extensive form games (perfect Bayesian equilibrium)
reading: MWG, chapter 9

Monday, September 21: signalling games
reading: MWG, chapter 9
Cho and Kreps, 1987, "Signalling games and stable equilibria", QJE, 52, pp179-221

Wednesday, September 23: repeated games
Problem set 2
reading: MWG, chapter 9

Monday, September 28: folk theorems
reading: MWG, chapter 9
Fudenberg and Maskin, "The folk theorem...", Econometrica, 1986

Wednesday, September 30: Proof of perfect folk theorem, Cournot oligopoly
reading: MWG, chapter 12

Monday, October 5: Cournot and Stackelberg oligopoly models
reading: MWG, chapter 12

Wednesday, October 7: Imperfect observability in the Stackelberg model
reading: Bagwell, "Commitment and Observability in Games", (1995) GEB (working paper version linked)

Monday, October 12: Collusion over the business cycle
reading: Rotemberg and Saloner, "A supergame-theoretic model of price wars during booms," AER 76, pp. 390-407

Wednesday, October 14: Collusion under imperfect monitoring, empirical evidence on cyclicality of cartel prices
reading: Green and Porter, "Noncooperative collusion under imperfect price information," Econometrica 52, pp. 87-100
readings: Porter, R. (1983) "A study of cartel stability: the Joint Executive Committee, 1880-1886," Bell Journal of Economics, 14, pp. 301-314
Ellison, G. (1994), "Theories of cartel stability and the Joint Executive Committee," RAND, 25, pp. 37-57

Monday, October 19: product differentiation: the linear city model
reading: Tirole, chapter 7

Wednesday, October 21: product differentiation: the circular city model
reading: Tirole, chapter 7

Monday, October 26: monopolistic competition and optimal product diversity
readings: Tirole, chapter 7
Dixit, A. and J. Stiglitz, "Monopolistic competition and optimum product diversity," AER 67, pp. 297-308

Wednesday, October 28: Labor market discrimination under monopolistic competition
reading: Sandford, et. al. "Employer discrimination and market structure" (working paper)

Monday, November 2: Equilibrium price dispersion
reading: Stahl, D. (1989) "Oligopolistic pricing with sequential consumer search," AER 79, pp. 700-712

Wednesday, November 4: Adverse selection
reading: MWG, chapter 13

Monday, November 9: Adverse selection in labor markets
reading: MWG, chapter 13

Wednesday, November 11: Labor market screening
reading: MWG, chapter 13

Monday, November 16: Statistical discrimination and pervasive discrimination
reading: Coate, S. and G. Loury (1993), "Will affirmative-action policies eliminate negative stereotypes?" AER, 83, pp. 1220-1240

Wednesday, November 18: Affirmative action in Coate and Loury
reading: Coate, S. and G. Loury (1993), "Will affirmative-action policies eliminate negative stereotypes?" AER, 83, pp. 1220-1240

Monday, November 30: Reputation, Markov perfection, and an example in a finitely-repeated game
readings: Kreps, D. and R. Wilson (1982), "Reputation and imperfect information," JET 27, pp. 253-279
Kreps, D., P. Milgrom, J. Roberts, and R. Wilson (1982), "Rational cooperation in the finitely repeated prisoners' dilemma," JET 27, pp. 245-252
Milgrom, P. and J. Roberts (1982), "Predation, reputation, and entry deterrence," JET 27, pp. 280-312

Wednesday, December 2: Reputations in infintely-repeated games, moral hazard
reading: Mailath, G. and L. Samuelson (2001), "Who wants a good reputation?" ReStud, 68, pp. 415-441

Monday, December 7: Experts and quacks
reading: Sandford, J. (2010), "Experts and quacks" RAND, 41, pp. 199-214
Catalan numbers

Wednesday, December 9: quacks, continued
reading: Spiegler, R. (2006), "The market for quacks" ReStud, 73, pp. 1113-1131