Advanced Microeconomics [10602-01]

Yvan Lengwiler
Tel.: +41 (0)61 267 3369
yvan.lengwiler-at-unibas.ch

Georg Nöldeke
Tel.: +41 (0)61 267 33 20
georg.noeldeke-at-unibas.ch

Daniel Mueller
Tel.: +41 (0)61 267 33 82
dani.mueller-at-unibas.ch

Announcements

5.1.: The exam is on Friday the 14th January 2011, from 10:15 until 11:45. WWZ s13: A-D; HS 102: E-L; Bernoullianum: M-Z. Please control the info in the Vorlesungsverzeichnis!

Further information for the exam.

Note: Tutorial 2, question 2: The budget constraint (Equation [5]) has to be "less than or equal" to 0 and not "greater than or equal" to 0.

Course Content

The lecture is taught in two parts. Part one, which is tought by Prof Lengwiler, covers deals with decision theory and general equilibrium theory. Decision theory deals with principles that govern individual optimizing behavior in non-strategic situations. We then study the interaction of individual decision makers through anonymous markets. This theory is known as general equilibrium theory, and is the basis of much of macroeconomics, international trade theory, fiscal theories, and asset pricing theory. Part two, taught by Prof Nöldeke, covers game theory. This field deals with strategic interaction between decision makers. It has become a very important and firmly established tool in all parts of economics.

General Information

Time and place:	Tuesday, 14.15-16.00 Organische Chemie, Grosser Hörsaal OC Wednesday, 08.15-10.00 Kollegienhaus, Hörsaal 001
Class starts on:	September 21, 2010

Readings

The Texts for this class are

Nolan Miller, "Notes on Microeconomic Theory", [NM]
Robert Gibbons, "A Primer in Game Theory," Pearson 1992 or - same book with a different title - "Game Theory for Applied Economists," Princeton University Press 1992 [RG]

Miller's Manuscript can be downloaded under

http://www.hks.harvard.edu/nhm/notes.htm

Moreover, we will cover parts of

Carl Simon and Lawrence Blume, "Mathematics for Economists", Norton & Co, 1994, [SB]
David Kreps, "A Course in Microeconomic Theory", Princeton, 1990, [DK]

Requirements

Chapter 2-5 and 13 of Simon and Blume [SB] is basic material about mathematical calculus, and is a prerequisite. We will not cover the material in class. However, it is assumed that you understand the material covered in these chapters.

Lit.: [SB, Ch 2-5, 13], additional readings.

Schedule

Part 1:

22.9

Overview of the Course, Rationality, and Euclidean Spaces

Lit: [NM, Ch 2.1], [SB, Ch 1, 10], additional reading, lecture notes.

Note: There was a mistake on page 4 of the slides before. This mistake has now been corrected. Please download the updated version.

28.9

Weak Axiom, Demand, and Preferences

Lit: [NM, Ch 2, 3.1, 3.2], [DK, Ch 2.1], additional reading, lecture notes.

29.9

Ordinal Utility, Derivatives and Gradients

Lit: [SB,14.1-14.6, 15.1, 15.2], additional readings, lecture notes.

5.10

Unconstrained and Constrained Optimization

Lit: [NM, Ch 3.3, 3.4; DK, 2.2 - 2.5, Appendix 1], additional readings, lecture notes.

To get all the details, you should read [SB, Ch 17,18,19,21.1-21.3], additional readings.

6.10

Tutorial 1

Exercises, Answers

Note: Exercise 2: The correct forecast of the profit is 1.949 million.

12.10

Properties of Demand Functions

Lit: [NM, Ch 6], [DK, Ch 6], additional readings, lecture notes.

13.10

General Equilibrium

Lit: [NM, Ch 6], [DK, Ch 6], [SB, Ch 22.3-22.4], additional readings, lecture notes.

19.10

Tutorial 2

Exercises, Answers

Note: The concept of the Kuhn-Tucker Lagrangian you can find on p. 440f of [SB]. The interpretation of the multiplier on p. 452 of [SB].

Additional exercise on general equilibrium:

Exercise, Answer

20.10

Production and Monopoly

Lit: [NM, Ch 5, 9], [DK, Ch 7, 9], additional readings, lecture notes.

26.10

Risk and Uncertainty

Lit: [NM, Ch 6], [DK, Ch 3, you can skip subsection 3.4], additional readings, lecture notes.

Note: Please download the new version of the lecture notes. I have fixed a few typos and made the explanation on slides 9 and 10 a bit more precise.

27.10

Tutorial 3

Exercises, Answers

Part 2:

2.11	Static Games of Complete Information I Lit: [RG, CH 1.1, 1.3] Slides (some typos and a faulty argument on slide 33 have been corrected) games 1 10 netz
3.11	Static Games of Complete Information II Lit: [RG CH 1.2] See previous lecture for the slides.
9.11	Static Game of Incomplete Information I Lit: [RG, CH 3.1] Slides (some typos and more substantial issues on slide 17 and on slide 23 have been corrected. Sorry for not catching those earlier.)
10.11	Static Games of Incomplete Information II Lit: [RG, CH 3.2, 3.3] See previous lecture for slides.
16.11	Tutorial 4 Problem Set, Solutions
17.11	Tutorial 5 Problem Set, Solutions
23.11	Multistage Games: Framework and Perfect Information Lit: [RG, Ch 2.1, 2.4] Slides
24.11	Multistage Games: Subgame Perfection and Two-Stage Games with Imperfect Information Lit:[RG, CH 2.2] See previous lecture for slides.
30.11	Repeated Games Lit: [RG, CH 2.3] Slides
1.12	Two-Stage Games with Incomplete Information Lit:[RG, CH 4.1, 4.2] Slides
7.12	Tutorial 6 Problem Set, Solutions
8.12	Tutorial 7 Problem Set, Solutions amic l 4 1028.11.10: I have made some changes to the problem set. If you have the previous version, there is no need to download the new one - you should simply ignore Problem 7 on the previous version.

Review:

14.12	Review of Part 1
15.12	Review of Part 2

Letzte Änderung: 18.05.2012