Microeconomics II (advanced level)
- To develop the competence of students in Microeconomics, with especial attention to decision-making models including game theory and social choice theory.
- How to aggregate individual interests into the unique social or group one
- The student should know based competitive economics models.
- The student should know optimality concepts on conflict situations and their characterizations.
- The student should know methods of finding optimal behavior in some classes of strategic games.
- The student should know cost/profit sharing methods.
- The student should know voting models.
- The subject and methods of game theory. Conflicts and cooperation, their mathematical models.
- Matrix games. Saddle points. Mixed strategies. Minimax Theorem.
- Non-cooperative n-person games. Optimality concepts in non-cooperative games, equilibrium. Game-theoretic models of oligopolies. Auctions.
- The mixed extension of non-cooperative games. Nash’s Theorem on existence of equilibria in mixed strategies in finite n-person games.
- Refiniments of equilibria. Perfect equilibria, strong equilibria, correlated equilibria.
- Games with incomplete information. Bayesian equilibria.
- Games in extensive form. Zermelo's Theorem on the existence of pure equlibria in finite extensive games with perfect information. Behavioral strategies Kuhn's Theorem.
- Dynamic games. Stochastic and recursive games. Repeated games with complete information.
- Cooperative games with transferable utilities. Characteristic functions. Solutions of cooperative games. The core and its existence. The Shapley value.
- Cost and profit sharing rules. Egalitarian and utilitarian rules.
- Bargaining problems. Axiomatic characterizations of bargaining solutions.
- Social welfare functions. Arrow’s Theorem and its extensions.
- Voting theory. Manipulation of preferences.
- Infinite two-person zero-sum games. Existence theorems
- Interim assessment (4 module)0.2 * Class participation + 0.6 * Final exam + 0.2 * Home assignments
- Barron, E. N. (2013). Game Theory : An Introduction (Vol. Second edition). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=565752
- Binmore, K. G. (2007). Game Theory: A Very Short Introduction. New York: OUP Oxford. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=209659
- Webster, T. J. (2014). Analyzing Strategic Behavior in Business and Economics : A Game Theory Primer. Lanham, MD: Lexington Books. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=748851
- Schmidt, C. (2003). Game Theory and Economic Analysis : A Quiet Revolution in Economics. London: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=93028