Economics 742: Introduction Organization, spring 2008
Instructor: Jeremy Sandford
Office hours: MW 4-5pm, 335L B&E
Lecture: MW 11am-12:15pm, 314 B&E
Required text: Gibbons, Robert Game Theory for Applied Economists, Princeton University Press
Schedule
Wednesday, January 9: normal form games
Monday, January 14: extensive form games
Wednesday, January 16: Nash equilibrium, trembling hand perfection, subgame perfection
Wednesday, January 23: subgame perfect equilibrium, perfect bayesian equilibrium
Homework 1, due 2/11/2008
Monday, January 28: repeated games I: grim trigger strategies, minmax payoffs
Wednesday, January 30: repeated games II: folk theorems
reading: Fudenberg, D. and E. Maskin (1986), "The folk theorem in repeated games with discounting or incomplete information", Econometrica, 54, pp.533-554
Monday, February 4: Cournot and Stackelberg models, commitment and observability
reading: Bagwell, K. (1995), "Commitment and observability in games", GEB, 54, pp271-280
Wednesday, February 6: Collusion and business cycles
reading: Rotemberg, J. and G. Saloner (1986), "A supergame-theoretic model of price wars during booms," AER, 76, pp.390-407
Monday, February 11: Imperfect monitoring in the prisoners' dilemma
reading: Mailath and Samuelson, section 7.2 (copy in box outside my office)
Wednesday, February 13: imperfect cartel monitoring
readings: Green, E. and R. Porter (1984), "Noncooperative collusion under imperfect price information," Econometrica, 52, pp. 87-100
Porter, R. (1983), "Optimal cartel trigger price strategies," JET, 29, pp. 313-338 (copy in box outside office)
Mailath and Samuelson, section 11.1 (copy in box outside office)
Monday, February 18: empirical evidence on cylicality of price wars
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
Homework 2, due 3/3/2008
Wednesday, February 20: Adverse selection with durable goods
reading: Hendel, I. and A. Lizzeri (1999), "Adverse selection in durable goods markets," AER, 89, pp. 1097-1115
Monday, February 25: Adverse selection, continued
reading: Hendel, I. and A. Lizzeri (1999), "Adverse selection in durable goods markets," AER, 89, pp. 1097-1115
Wednesday, February 27: No class
Monday, March 3: Student presentations
Bo Jiang: Stahl, D. (1989), "Oligopolistic pricing with sequential consumer search," AER, 79, pp. 700-712
Ryan Edmonds: Fevrier, P., L. Linnemer, and M. Visser (2007), "Buy or Wait, that is the option: the buyer's option in sequential laboratory auctions," Rand, 38, pp. 98-118
Wednesday, March 5: Durable good monopolists
reading: Bulow, J. (1982), "Durable-goods monopolists," JPE, 90, pp. 314-332
Bulow, J. (1986), "A theory of planned obsolescence," QJE, 101, pp. 729-750
Tirole, pp. 79-94
Monday, March 10, Wednesday, March 12: No class, spring break
Monday, March 17: Planned obsolescence
reading: Bulow, J. (1986), "A theory of planned obsolescence," QJE, 101, pp. 729-750
Homework 3, due 4/7/08
Wednesday, March 19: Student presentations
Amanda Dugan: Kristiansen, E. (1998), "R&D in the presence of network externalities: timing and compatibility," RAND, 29, pp. 531-547
Jill Kirby: Johnston, J. and J. Waldfogel (2002), "Does repeat play elicit cooperation? Evidence from federal civil litigation," Journal of Legal Studies, 31, pp. 39-60
Monday, March 24: Reputations in finitely-repeated games
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, March 26: 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, March 31: Student presentations
Sunayan Acharya: Bulow, J. and P. Klemperer (1999), "The generalized war of attrition," AER, 89, pp. 175-189
David Barrus: Milgrom, P. and J. Roberts (1986), "Price and advertising as signals of product quality," JPE, 94, pp. 796-821
Wednesday, April 2: Bad reputation
reading: Ely, J. and J. Valimaki (2003), "Bad reputation," QJE, 118, pp. 785-814
Monday, April 7: Student presentations
Aziz Berdiev: Albert, M., W. Guth, E. Kirchler, B. Maciejovsky (2007), "Are we nice(r) to nice(r) people? An experimental analysis," Experimental Economics, 10, pp. 53-69
Kusum Singh: Sorenson, A. (2000), "Equilibrium price dispersion in retail markets for prescription drugs," JPE, 108, pp. 833-850
Wednesday, April 9: The market for quacks
reading: Spiegler, R. (2006), "The market for quacks," ReStud, 73, pp. 1113-1131
Monday, April 14: Information cascades
reading: Bikhchandani, S., D. Hirshleifer, and I. Welch (1992), "A theory of fads, fashions, custom, and cultural change as information cascades," JPE, 100, pp. 992-1026
Wednesday, April 16: Student presentations
Abdullah Al-Bahrani, Bagwell, K. and G. Ramey (1994), "Coordination economies, advertising, and search behavior in retail markets," AER, 84, pp. 498-517
Steve Waldman: Dell'ariccia, G. and R. Marquez (2006) "Lending booms and lending standards," Journal of Finance, 61, pp. 2511-2546
Monday, April 21: Student presentations
Xiaofei Wang: Puller, S. (2007), "Pricing and firm conduct in California's deregulated electricity market," ReStat, 89, pp. 75-87
Wednesday, April 23: No class