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Syllabus for Economics 603 (second half)
Fall 2023–2024
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Official Matters
Economics 603 is the first semester of the Economics Department’s 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.
Problem sets, solutions to problem sets, transparencies and online copies of readings (where available) will be posted on ELMS:
https://elms.umd.edu/
There will be seven problem sets (numbered 7 – 13) for the second half of the course. Written solutions will be made available to many of the problems contained in the problem sets — but your main source of solutions for one or two questions from each problem set will be to attend the weekly Discussion Section.
Note that Tuesday October 31 is Halloween! Everyone is encourage to wear a costume to class!!!
The course is intended to be held in person this semester. However, the professor reserves the right to move the course online at any time and for any reason, in which case you will be notified by email of the contingency plan, including a Zoom link.
If you are sick, test positive for COVID-19, or think you may have been in contact with someone who has COVID-19, please stay home and let the professor and teaching assistant know so that appropriate accommodations for the missed classes can be made.
It is our shared responsibility to know and abide by the University of Maryland’s graduate school course-related policies, which include topics such as academic integrity, student conduct, faculty member responsibilities, attendance, excused absences, and grading. UMD’s policies on graduate courses and graduate student rights and responsibilities can be found here: Course Related Policies | The University of Maryland Graduate School (umd.edu).
The final exam will be held at 10:30 am – 12:30 pm on Thursday, December 14, 2023 (which is not the ordinary final exam slot for this class time) in Tydings 0117.
Texts
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
Instructors and Course Times
Professor: Lawrence Ausubel (ausubel@umd.edu)
Lectures: Tuesdays/Thursdays 2:00 – 3:15 pm in Tydings 1118
Teaching Assistant: Lixi Wang (lixiwang@umd.edu)
Discussion Sections: Tuesdays 5:15 – 6:45 pm in Tydings 1132
Office Hours
Professor Ausubel’s Office Hours: Thursdays 12:30 pm – 1:30 pm in Tydings 4130C
Lixi Wang’s Office Hours: Mondays/Wednesdays 11 am – 12 noon in Tydings 4128
Topics for Second Half of Course (approximately two weeks per topic)
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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)
[For a second reading (e.g., while preparing for comps): MWG, pp. 217-253 and 260-261.]
Supplemental reading:
Tirole, J., “Product Differentiation: Price Competition and Non-Price Competition,” chapter 7 of The Theory of Industrial Organization, MIT Press, 1988
Problem Sets 7, 8 and 9 Assigned
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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 10 and 11 Assigned
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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
Ausubel, L., P. Cramton, M. Pycia, M. Rostek and M. Weretka, “Demand Reduction and Inefficiency in Multi-Unit Auctions,” Review of Economic Studies, December 2014, 1366-1400
Ausubel, L. and P. Milgrom, “The Lovely but Lonely Vickrey Auction,” Chapter 1 of Combinatorial Auctions (P. Cramton, Y. Shoham, and R. Steinberg, eds.), Cambridge: MIT Press, 2006, 17-40
Problem Set 12 Assigned
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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.]
Problem Set 13 Assigned
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