Economics 703: Advanced Microeconomics [ Syllabus ]

Professor Peter Cramton

Tuesday and Thursday, 9:30 am to 10:45 am, Tydings 0111, Fall 2011

 

Presents a formal treatment of game theory. We begin with extensive-form games. A game tree is defined, as well as information sets and pure, mixed and behavioral strategies. Existence of Nash equilibria is discussed. We then turn to the analysis of dynamic games, covering repeated games, finitely repeated games, the folk theorem for repeated games, subgame perfection, and punishment strategies. Next, games with incomplete information are studied, including direct revelation games, concepts of efficiency, and information transmission. Several refinements of Nash equilibria are defined, such as sequential equilibria and stable equilibria. The analysis of enduring relationships and reputations is covered. The course concludes with a discussion of two important applications of game theory: auctions and bargaining. The topics include sealed-bid auctions, open auctions, private valuation and common valuation models, the winner’s curse, auction design, bargaining with incomplete information, and combinatorial auctions.

Course Materials

Web exercises can be found at http://gametheory.tau.ac.il/student/. You log in with the course number 2001 and your email address. The class password is 1046. It is case sensitive. Web exercises we have completed so far have active links below:

Web Exercise 1 Web Exercise 2 Web Exercise 3 Web Exercise 4 Web Exercise 5

Lecture Notes Slides
  1. Foundations
  2. Dynamics
  3. Mechanism Design
  4. Refinement
  5. Signaling
  6. Auctions, Reputations, and Bargaining
  7. Demand Reduction
  8. Optimality of Being Efficient
  9. Clock-Proxy Auction
  10. Combinatorial Auctions
  11. Spectrum Auction Design
  1. Foundations
  2. Dynamics
  3. Mechanism Design
  4. Refinement
  5. Signaling
  6. Auctions, Reputations, and Bargaining
  7. Auctioning Many Similar Items
  8. Auctions with Resale
  9. Practical Auction Design
  10. Spectrum Auction Design
  11. Incentive Auctions
Problem Sets Problem Set Answers
  1. Problem Set 1 due Sep 27
  2. Problem Set 2 due Oct 13
  3. Problem Set 3 due Nov 1
  4. Problem Set 4 due Nov 8
  5. Problem Set 5 due Nov 15
  6. Problem Set 6 due Nov 22
  7. Problem Set CV Auction due Nov 29
  8. Problem Set 7 due Dec 1
  9. Problem Set 8 not assigned
  10. Problem Set 9 due Dec 6 (problems 1-3 only)
  11. Problem Set 10 due Dec 13
  1. Answers 1
  2. Answers 2
  3. Answers 3
  4. Answers 4
  5. Answers 5
  6. Answers 6
  7. Answers CV Auction
  8. Answers 7
  9. Answers 8
  10. Answers 9
  11. Answers 10

Other Materials
 Vayanos RESTUD 1999, strategic-trading-in-dynamic-market