Intermediate Microeconomics


 date:2010-1-7 11:20:00 source:BiMBA         

References:

Hal Varian: Intermediate Microeconomics: A Modern Approach, Sixth Edition, W.W. Norton & Company, 2003(Teaching Material)

Xinqiao Ping: Eighteen Lectures of Intermediate Microeconomics, Peking University Press, Beijing, 2001

Hal Varian: Microeconomics Analysis, Third Edition, W.W. Norton & Company, 1992

Structure of the Course:

1.       Introduction: The Market

2.       Budget Constraint and Preferences

3.       Utility and Choice

4.       Demand

5.       Revealed Preference and Slutsky Equation

6.       Buying and Selling

7.       Intertemporal Choice

8.       Asset Markets

9.       Uncertainty

10.   Consumer's Surplus and Market Demand

11.   Equilibrium

12.   Technology and Profit Maximization

13.   Cost Minimization and Cost Curves

14.   Mid-Term Examination

15.   Firm Supply

16.   Industry Supply

17.   Monopoly

18.   Monopoly Behavior

19.   Oligopoly

20.   Game Theory

21.   Game Applications

22.   Exchange

23.   Production

24.   Externalities

25.   Public Goods

26.   Asymmetric Information

27.   Review

28.   Final Examination

Course Objectives:

This course will introduce you the foundations of the analysis of microeconomic decision-making, such as the theory of consumer behavior, theory of the firm, and how markets function. This course develops analytical tools to investigate and solve the problems that consumers and firms face. Students will learn analytical methods used in microeconomics, such as graphs, tables, algebra, calculus, and case studies. It is also hoped that that students will be able to apply microeconomic analysis to economic fields, including labor, development, taxation, international trade, etc.

Examination:

Regular attendance, participation, four quizzes, homework: 20%

Mid –Term Test: 40%

Final Test: 40%

Credits & Workload:

4 Credits & 4 hours per Week (teaching) + 2 hours per Week (tutoring); 15 Weeks, 60 hours (teaching) + 30 hours (tutoring)

Excerpt:

Notes of Chapter 20 Game Theory

Nash EquilibriumNE: Given other's strategy, nobody has incentive to deviate.

Example 1. Majority Voting

Model set-up:

Three voters 1,2 and 3 want to decide whether to vote project a or b.

The Voting process is majority voting.

If project a is passed (two or more than two people agree a), 1,2 and 3 all have pay-off 1

If project b is passed, 1,2 and 3 all have pay-off 0, in other words, everyone prefer a to b.

What is NEs in this game?

Intuitive explain:

(a, a, a) is obvious, but what about (b, b, b)?

It's a NE too.

Formal solution: Three player's normal form

2

a

a

b

1

a

1, 1,1

1, 1, 1

b

1,1,1

Voter3

0, 0, 0

2

a

b

b

1

a

1,1,1

0,0,0 

b

0,0,0

0,0,0

Figure1

All NEs in figure 1: (a,a,a), (a,b,a), (b,a,a), (b,b,b), (a,b,b).

Comment: Multi-equilibriums exist in example1. NE is not a desirable concept of equilibrium in this case. Sometimes we need to refine the equilibriums: a stronger concept of equilibrium.

 
 
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