Econ 317

Class Time: M 4:00 - 6:50 p.m.

Room: Burkle 12

Office Hours: M 2:30 - 4:00 p.m. 

Texts:

Microeconomic Theory by Andreu Mas-Colell, Michael D. Whinston, and Jerry R. Green, Oxford University Press, 1995.

Game Theory for Applied Economists by Robert Gibbons, Princeton University Press, 1992.

Also Recommended: 

How To Build an Economic Model in Your Spare Time by Hal R. Varian, The American Economist, vol. 41 no. 2, fall 1997.

William Thomson, “The Young Person’s Guide to Writing Economic Theory” Journal of Economic Literature 37:1 (March, 1999): 157-183.

The Theory of Industrial Organization by Jean Tirole, 1988.

Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life by Avinash K. Dixit and Barry J. Nalebuff, 1991.

Course Description: This course emphasizes tools, techniques, and applications of game theory. There will be three exams worth 25% each and assignments worth 25%. Each exam will have two questions with several parts. One of the questions will be a modified version of an assignment question, and the second question will be new. The first exam will be held in class on February 26. The second exam will be held in class on April 2. The third exam will be held in class on April 30.

Static Games of Complete Information:

1. Dominance and Nash Equilibrium MWG Ch. 7, 8, 12; Gibbons Ch. 1

Dynamic Games of Complete Information:

1. Subgame Perfection MWG Ch. 9; Gibbons Ch. 2

Repeated Games:

1. Repeated Games and the Folk Theorem MWG Ch. 12

Thomas Borcherding and Darren Filson, "Group Consumption, Free Riding, and Informal Reciprocity Agreement" Journal of Economic Behavior & Organization 47:3 (March, 2002): 237-57.

Games of Incomplete Information:

1. Bayesian Nash Equilibrium MWG Ch. 8

2. Weak Perfect Bayesian Equilibrium MWG Ch. 9; Gibbons Ch. 3, 4

Advanced Topics:

1. Signaling Games MWG Ch. 13; Gibbons Ch. 3, 4

2. Principal Agent Problems MWG Ch. 14

3. Bargaining Games

4. Markov-perfect Nash Equilibrium

Darren Filson and Suzanne Werner, "A Bargaining Model of War and Peace: Anticipating the Onset, Duration, and Outcome of War" American Journal of Political Science 46:4 (October, 2002): 819-38.

Darren Filson and Suzanne Werner, "Bargaining and Fighting: The Impact of Regime Type on War Onset, Duration, and Outcomes" American Journal of Political Science 48:2 (April 2004): 296-313.

Darren Filson "The Impacts of Price Controls on the Performance of the Research-Based Pharmaceutical Industry" Claremont Graduate University working paper, 2006. 

Tentative Lecture Outline:

1. January 22:

Simultaneous Move Games and Dominance

Nash Equilibrium and Cournot and Bertrand Competition

Mixed Strategies

2. January 29:

Dynamic Games, Subgame Perfect Nash Equilibrium, Centipede Game, Generalized Backward Induction

3. February 5:

The Stackelberg Game, a Policy Game

4. February 12:

Repeated Games, Finitely Repeated Games

Infinitely Repeated Games, Prisoner's Dilemma, Bertrand

5. February 19:

Infinitely Repeated Games 

Review for Midterm

6. February 26: Midterm 1

7. March 5:

Go Over Midterm 

Borcherding and Filson (2002)

8. March 12: Spring Break

9. March 19:

Intro to Incomplete Information, Bayesian Nash Equilibrium

Sequential Rationality and Weak Perfect Bayesian Equilibrium

10. March 26:

Signaling

Review for Midterm

11. April 2: Midterm 2

12. April 9:

Go Over Midterm

Principal Agent Problems

13. April 16:

Bargaining Models

Filson and Werner (2002, 2004)

14. April 23:

Markov-perfect Nash Equilibrium

Filson (2006) 

Review for Final

15. April 30: Final