Course Description           (Winter 2022-2023)

 

Economics  411          Topics in Microeconomic Theory

 

Instructor:       Ruqu Wang   

                        Dunning Hall, Room 304, wangr@queensu.ca,  613-533-2272

                        Office Hours:  Wednesdays, 1:00-2:30pm (in Jeffrey 126 if the classroom is free)    

TAs:                Jin Young Yoon, Office Hours: Mondays 11:30-1:00pm, Dunning 350, yoon.j@queensu.ca

                        Chenkai Liang, Office Hours: Tuesdays 2:30-4:00pm, Dunning 322, c.liang@queensu.ca

 

Link to ECON 411 Announcements (January 18, 2023) 

 

In this course, we examine important topics in microeconomics. The topics for this year are games of asymmetric information and their applications in auctions, mechanism design, and contracts. We first discuss game theory concepts, such as Nash equilibrium, subgame-perfect equilibrium, Bayesian equilibrium, perfect Bayesian equilibrium, and then apply them to auctions, optimal auctions, signaling, adverse selection, moral hazard, and incentive contracts. Course materials consist of lecture notes and papers from the literature.

Grading:

                        Class participation -- 20%

                        Homework -- 20%

                        Midterm exam -- 30%

                        Short term paper -- 30%

Midterm exam: Wednesday, March 15, 2023,  in class

 

Required textbooks:  None.

Reference books:

#1. Strategies and Games : Theory and Practice, by Dutta, Prajit K., MIT Press, 1999.

#2. Auction Theory, by Vijay Krishna, 2nd Edition, Academic Press,  2010.

#3. Contract Theory, by Bolton and Dewatripont, Cambridge, MA: MIT Press, 2005.

 

 

Teaching Plan

(This is our plan; what will be covered may vary.)

1.  Review of Basic Game Theory

        Pure strategies, mixed strategies, dominated and dominant strategies, static games, Nash equilibrium, dynamic games, subgame-perfect equilibrium

    2.  Games of Asymmetric Information

Bayesian equilibrium, perfect Bayesian equilibrium

    3.  Signaling Games

            Separating equilibrium, pooling equilibrium

 4.  Auctions, Mechanism Design

        Private values, common values, winner’s curse, English auctions, Dutch auctions, first-price and second price auctions, optimal auctions

    5.  Adverse Selection, Moral Hazard, Contracts

            Lemon’s problem, insurance, incentives

 

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