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Syllabus for Economics 603 (second half)

Fall 2018–2019


Official Matters

Economics 603 is the first semester of the Economics Departments two-semester core sequence in Microeconomics. This course is taken by all first-year Economics Ph.D. students, as well as by quite a few Ph.D. students in Agricultural & Resource Economics, the Smith School of Business, and other academic departments. The first half of the semester treats consumer theory and the theory of the firm. The second half of the semester is an introduction to game theory and its applications in economics.

All official course announcements will be posted on the course home page:


Problem sets, solutions to problem sets, transparencies and online copies of readings (where available) will be posted on ELMS:


There will be about 6 problem sets for the second half of the course. For your reference, all of the previous years problem sets are currently posted on ELMS. However, there will be some new questions added to some of the problem sets. You should refer to the most recent version at the time of doing the problem sets—the most recent version will be dated “Fall 2018 – 2019”. There will be written solutions made available to many of the problems contained in the problem sets—but your only source of solutions for one or two questions from each problem set will be to attend the weekly Discussion Sections.

The final exam will be held at 10:30 am – 12:30 pm on Wednesday, December 12, 2018 (which is not the ordinary final exam slot for this class time) in a location to be announced.


R. Gibbons, Game Theory for Applied Economists, Princeton Univ. Press, 1992 (paperback).

A. Mas-Colell, M. Whinston and J. Green (henceforth “MWG”), Microeconomic Theory, Oxford Univ. Press, 1995.

Course Times

Tuesdays/Thursdays 2:00 pm - 3:15 pm, Tydings 0102

Discussion Section: Tuesdays 5:15 pm - 6:15 pm, Tydings 0102

Teaching Assistant: Santiago Velez Ferro (velez@econ.umd.edu)

Office Hours

Professor Ausubels Office Hours: Tuesdays and Thursdays, 11:30 am – 12:30 pm, Tydings 4130C

Santiago Velez Ferros Office Hours: Tuesdays, 11:00 am - 12:00 noon, Tydings 4118C

Syllabus for First Half of Course

Topics for Second Half of Course (approximately two weeks per topic)

  1. Oligopoly and Static Games of Complete Information

    Gibbons, chapter 1

    MWG, pp. 943-953 (continuity, compactness, correspondences and fixed-point theorems)

    MWG, pp. 383-400 (especially pp. 395-400)

    Tirole, J., “Product Differentiation: Price Competition and Non-Price Competition,” chapter 7 of The Theory of Industrial Organization, MIT Press, 1988

    [For a second reading (e.g., while preparing for comps): MWG, pp. 217-253 and 260-261.]

    Problem Sets #7-8 Assigned


  2. Dynamic Games of Complete Information

    Gibbons, chapter 2

    Rubinstein, A., “Perfect Equilibrium in a Bargaining Model,” Econometrica, 1982, 97-109

    [For a second reading (e.g., while preparing for comps): MWG, pp. 267-282, 296-299, and 400-423.]


    Supplemental reading:

    Binmore, K., “Making Deals,” chapter 5 of Fun and Games, D.C. Heath & Co., 1992

    Coase, R., “The Problem of Social Cost,” Journal of Law and Economics, 1960

    Problem Sets #9-10 Assigned


  3. Static Games of Incomplete Information

    Gibbons, chapter 3

    Ausubel, L. (2003), “Auction Theory for the New Economy” (short survey aimed toward grad students)

    [For a second reading (e.g., while preparing for comps): MWG, pp. 253-260.]


    Supplemental reading:

    Milgrom, P., “Auctions and Bidding: A Primer,” Journal of Economic Perspectives, Summer 1989, 3-22

    Ashenfelter, O., “How Auctions Work for Wine and Art,” Journal of Economic Perspectives, Summer 1989, 23-36

    Vickrey, W., “Counterspeculation, Auctions, and Competitive Sealed Tenders,” Journal of Finance, 1961, 8-37

    Ausubel, L., “An Efficient Ascending-Bid Auction for Multiple Objects,” American Economic Review, December 2004, 1452-1475

    Cramton, P., “The FCC Spectrum Auctions: An Early Assessment,” Journal of Economics & Management Strategy, Fall 1997, 431-495

    Problem Sets #11-12 Assigned


  4. Dynamic Games of Incomplete Information

    Gibbons, chapter 4

    Spence, A.M., “Job Market Signaling,” Quarterly Journal of Economics, 1973, 355-374

    [For a second reading (e.g., while preparing for comps): MWG, pp. 282-296 and 436-460.]

© 2018 Lawrence M. Ausubel