Economics 200C: Microeconomic Theory

Economics 200C: Games and Information, Second Half, Spring 2009

Economics 200C: Games and Information concludes the microeconomics core. It provides an introduction to noncooperative game theory, developing methods for analyzing how people make decisions when their consequences are influenced by other peoples’ decisions, and showing how to use those methods to analyze strategic and informational questions in microeconomics. My half of the class focuses on the last group of topics.

Your grade for 200C will be a simple aggregate of your grades on Joel Sobel’s and my semi-finals.

Instructor: Professor Vincent Crawford, Economics 319 (vcrawfor@weber.ucsd.edu, 858-534-3452)

Office hours: Economics 319, 2:00-3:00 on Wednesdays, or by appointment

TA: David Eil: Office hours Thursdays 1:00-3:00 in SQH 238, Sections Mondays (except May 25, Memorial Day) 1:30-3 in SQH 244

Lectures: Tuesdays and Thursdays 8:00 (promptly)-9:50 in Economics Room 300; first meeting of my part Thursday, May 7

Semi-Final Exam: The semi-final, 80 minutes, closed-book, will be in Econ 300, Thursday, June 11th, from 8:00 to 9:20 a.m.

Practice Problems: There are no formal homework assignments, but it is strongly recommended that you do these practice problems and the textbook problems listed here. (pdf)

Syllabus (pdf)

Lecture notes (for this part of the course) (pdf)

Textbooks: The lectures will mainly follow readings in Andreu Mas-Colell, Michael Whinston, and Jerry Green, Microeconomic Theory, Oxford 1995, the required text ("MWG"), and for some topics David Kreps, A Course in Microeconomic Theory, Princeton 1990 ("Kreps"). There are also some useful readings in John McMillan, Games, Strategies, and Managers, Oxford 1992, and Hal Varian, Microeconomic Analysis, W. W. Norton 1992 (third edition).

Readings: The lectures will mainly follow:

Mas-Colell, Whinston, and Green, Microeconomic Theory, Oxford 1995 (“MWG” below)

Kreps, A Course in Microeconomic Theory, Princeton 1990 (“Kreps”)

I have also listed some readings in:

McMillan, Games, Strategies, and Managers, Oxford 1992 (“McMillan”)

Varian, Microeconomic Analysis, W. W. Norton 1992 (third edition) (“Varian”)

I suggest that you do all the readings in MWG and Kreps below plus whatever else you find helpful. (Varian is helpful, but is not an adequate substitute for MWG and Kreps for our purposes.)

1. Adverse Selection

MWG 436-450; Kreps 625-629; Varian 466-469

George Akerlof, “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism,”

Quarterly Journal of Economics (August 1970)

George Akerlof, “Behavioral macroeconomics and macroeconomic behavior,” American Economic

Review (June 2002)

2. Signaling and Screening

MWG 450-467; Kreps 629-652; Varian 469-471

Michael Spence, “Job Market Signalling,” Quarterly Journal of Economics (August 1973)

Michael Rothschild and Joseph Stiglitz, “Equilibrium in Competitive Insurance Markets: An Essay

on the Economics of Imperfect Information,” Quarterly Journal of Economics (November 1976)

Joseph Stiglitz, “Information and the change in the paradigm in economics,” American Economic

Review (June 2002)

3. Agency

MWG 477-506; Kreps 577-614 and 661-674; Varian 441-466; McMillan 91-129

4. Incentives and Mechanism Design

MWG 857-910; Kreps 661-703; McMillan 133-159

Vincent Crawford / UCSD Department of Economics / last modified 6 May 2009