Announcements: Solutions to the final exam are now posted…
Advanced Microeconomic Theory II, the second quarter of the Ph.D. microeconomics sequence, covers the fundamentals of information and decision theory, game theory and imperfect competition. There will be biweekly problem sets, an in-class midterm and an in-class final.
Students should own (or have regular access to) the principal text, Microeconomic Theory by Mas-Colell, Whinston and Green (Oxford, 1995, ISBN=0-19-507340-1, denoted MWG below). They also should have at least occasional access to two secondary texts: The Analytics of Uncertainty and Information, by Hirshleifer and Riley (Cambridge University Press, 1992, denoted HR below) for information and decision theory, and Strategy: An Introduction to Game Theory, Second Edition by J. Watson (WW Norton, 2008, ISBN-13=978-0393929348 denoted W08 below) for game theory. It will be useful on occasion to consult the alternative texts: A Course in Microeconomic Theory by David M. Kreps (Princeton University Press, 1990) and Microeconomic Analysis, 3rd Edition, by Hal R. Varian (Norton, 1992). All these books will be on reserve in the Science Library.
Lecture notes and supplemental readings will be posted below. Each student is expected to help prepare the answer key to one problem set, which then will also be posted below.
The class meets Tu Th 8:00 – 9:35am in 169 JBE.
Section meets Wed 3:30 – 4:30pm in 499 Engineering 2.
Office hours are W 1:30-3:30pm in 417 Engineering 2, and by appointment.
Due Dates Final exam remotely administered 8am Thurs Nov 19.
Readings
DRC accommodations. UC Santa Cruz is committed to creating an academic environment that supports its diverse student body. If you are a student with a disability who requires accommodations to achieve equal access in this course, please submit your Accommodation Authorization Letter from the Disability Resource Center (DRC) to me privately during my office hours or by appointment, preferably within the first two weeks of the quarter.
- Answer key for Final Exam // Posted on March 21, 2020
- Many thanks to Weinan! Dan’s comments are added using sticky notes.
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- Final Exam // Posted on March 21, 2020
- The final exam offered 9am – noon, Thursday March 19.
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- answer key for final practice problems // Posted on March 18, 2020
- Handwritten solutions to practice problems.
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- Answer Key for PS 4 // Posted on March 14, 2020
- Thanks to Roberto, Pedro and Thinkling!
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- Notes: chapter 12 // Posted on March 9, 2020
- Notes on Principal/Agent problem and related matters.
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- practice problems for final exam // Posted on March 9, 2020
- Try the problems on the first 2 pages with a time limit of 3 hrs. Then try the other two problems, and improve your answers to the previous problems. Solutions to be posted March 17.
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- Notes #10 // Posted on March 3, 2020
- Lecture notes on adverse selection, updated (thanks to Vivian!).
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- Notes #11 // Posted on March 3, 2020
- Notes on signalling and screening models.
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- Answer Key PS 3 // Posted on Feb. 29, 2020
- Answer key to PS 3. Thanks to Mariana, Ian and Hamid!
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- Notes on imperfect competition, slightly updated // Posted on Feb. 24, 2020
- Ch 09 of notes, for lectures Feb 25 – 27.
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- Problem Set 4 // Posted on Feb. 24, 2020
- This problem set is much longer than the previous one, so an early start will be helpful. The due date is corrected to March 10. Don’t forget to give credit to classmates (or other resources) for help.
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- Notes on cooperative game theory // Posted on Feb. 18, 2020
- Chapter 8 of the notes file…not recently checked..
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- evGames application to international trade // Posted on Feb. 17, 2020
- This paper by Dan F and KC Fung was one of the first substantive economic applications of Evolutionary Game Theory. Not required reading, but skimming it may give you some ideas.
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- Evolutionary Games Notes // Posted on Feb. 17, 2020
- Updated notes for Dan’s 2/18/20 lecture on Evolutionary Games. An erroneous bullet point from the previous version is dropped, and the conjectured error on 2×2 classifications seems not to exist.
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- Midterm 2020 answer key // Posted on Feb. 16, 2020
- Thanks to Weinan, Aiden and Rolly!
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- Problem Set #3 // Posted on Feb. 13, 2020
- Due in class Tuesday Feb 25. Due to the short turn-around, this PS is shorter than PS #4 will be.
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- Notes intstallment #6 // Posted on Feb. 13, 2020
- Notes on repeated games
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- answer key for MT practice problems // Posted on Feb. 9, 2020
- answer key of MT practice problems (actual MT exam from 2017). It seems that the payoffs assumed in the answer key for problem 4b are not quite those given in the problem; apologies for that.
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- Official Cheat sheet // Posted on Feb. 8, 2020
- Thanks to Thinkling!
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- Answer Key PS2 // Posted on Feb. 7, 2020
- Thanks to Bhavyaa, Ken, and Qianping!
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- Thinkling thoughts on SOSD // Posted on Feb. 5, 2020
- Thinkling wrote up some nice points about representing means geometrically on a cdf diagram (as an area) and the implications for less conventional examples of second degree stochastic dominance.
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- MT practice problems // Posted on Feb. 4, 2020
- Practice under timed conditions solving these actual problems from a previous year’s midterm exam. Solutions will be posted Sunday Feb 9.
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- Notes Ch 05 // Posted on Feb. 2, 2020
- DF + MMcG notes on solving EFGs.
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- Ten Treasures plus ten empirical NE counterexamples // Posted on Jan. 30, 2020
- This article (later published in the AER) by Holt and Goeree gives examples where NE does a good job of predicting actual behavior, and other examples where it does not. Warning: some of the examples are carefully selected to make QRE look good.
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- Answer Key to PS 1 // Posted on Jan. 28, 2020
- Thanks to Gagandeep, Vivian and Thinkling! Corrections now included.
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- Proof that Nash Equilibrium exists in finite NFGs. // Posted on Jan. 27, 2020
- Streamlined, self-contained proof by Adam Brandenberger. Note that it works for many sorts of games that are not finite. Here is a challenge: find a game that has no NE even in mixed strategies. Easier: what can we say about the payoff function of such a game?
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- Notes #4 // Posted on Jan. 27, 2020
- Notes on Nash equilibrium and related solution concepts for Normal Form Games, updated (thanks to Hamid!).
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- Kreps’ Games // Posted on Jan. 23, 2020
- Examples and counterexamples from Kreps.
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- Problem Set #2 // Posted on Jan. 21, 2020
- Due in class February 4
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- Notes #3 // Posted on Jan. 21, 2020
- Chapter 3 of Notes for this chapter, by DF and MMcG.
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- Bayes spreadsheet // Posted on Jan. 14, 2020
- An excel template for doing repetitive Bayesian calculations.
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- Notes #2 // Posted on Jan. 14, 2020
- Notes on Bayesian decision theory
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- Notes #1. Risky Choice // Posted on Jan. 8, 2020
- The current version corrects dozens of notational glitches and typos. Please let Dan know if you see any more that he missed (bonus points can be earned that way!).
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- Problem Set #1 // Posted on Jan. 2, 2020
- First problem set, due in class Tues Jan 21. Warning: some of these problems are challenging, so you are advised to try them right after relevant lectures.
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- syllabus // Posted on Jan. 2, 2020
- The updated course syllabus.
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- duffy and feltovich paper on correlated equilibrium // Posted on Feb. 16, 2014
- introduction may be worth a look…
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- Continuous Dilemma paper // Posted on Feb. 11, 2014
- Students interested in repeated game theory and applications may find the introduction and concluding discussion of this paper worth reading. The math appendix is not for everyone, but does touch on epsilon equilibria and begins to formalize some new intuition.The paper won the Exeter Prize for the best paper published anywhere in 2012 on decision theory, behavioral or experimental economics.
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