Carleton University

ECON 4900, Microeconomic Seminar, Fall 2002

 

Course: Honours seminar in economics (micro half)

Instructor: Keith Acheson, E-mail  keith_acheson@carleton.ca   Office A804 of Loeb Bldg

Office hours: Wednesday 10am – 1pm; contact me by email to make appointments at other times. Carleton University.

                                                                                                                                                                                                               

Note: The second (macro) half of the 490 course is given in the winter 2002 term. Each of the micro and macro halves of 490 is worth fifty percent of the final mark for the full year course. The information that follows refers only to the micro half given in the fall term. Iinformation about the macro half will be distributed in the winter term.

 

The micro half of the Honours Seminar mainly addresses interactions among economic agents whose decisions are known to affect each other and who may make decisions under different informational settings over time. This analysis enhances our understanding of non-price taking markets, contracting, organizational structure, institutions, laws, mores and economic policy.

 

Basis of class assessment

 

Tests: There will be two tests, one of two hours held on Oct. 9, 2002 (worth 35%) and one of two hours held on Nov. 27, 2002 (worth 40%). The tests will be held in that day’s class and will mostly consist of problems.

Assignment 1: Each student will prepare a report on an article chosen from a list that will be distributed in the class of Sep. 18, 2002. Each student will notify the instructor of his or her choice. There is an advantage in choosing early as a student may not choose an article that has already been chosen by another student. The target length of a report is 1250 words and the maximum length for a report is 1500 words. The report is worth 25% of the final mark. The report is due by Nov. 6, 2002. Late reports policy: One full grade if submitted in the week following the deadline. A report will not be accepted after one week past the deadline. Please be aware that plagiarism is a serious offense and one which should be recognized and avoided.  For further information regarding this subject, please see the Economics website or pick up a handout from the Department.

Note: Students with disabilities requiring academic accommodations in this course are encouraged to contact a coordinator at the Paul Menton Centre for Students with Disabilities to complete the necessary letters of accommodation. After registering with the PMC, make an appointment to meet and discuss your needs with me at least two weeks prior to the each of the class tests. This is necessary in order to ensure sufficient time to make the necessary arrangements. Please note the following deadlines for submitting completed forms to the Paul Menton Centre: November 1st for fall and fall/winter term courses, and March 7th for winter term courses.

 

Note: Students must fulfill the course requirements in order to achieve a passing grade. Failure to complete any of the course assignments will result in a grade of F in the micro half of this course. For general information on meeting course requirements, see the 2002/2003 regulations on line.

 


Course outline:

 

The general topics with the readings from the text are listed below. Adjustments in what we cover may occur as we proceed. Class lectures and discussions will give guidance as to the relative importance of different subjects. The classes will combine lectures and discussions of problems.

 

The text is Joel Watson, Strategy: An introduction to Game Theory, Norton, 2002.

 

Topics and readings

 

I. Game theory

  1. Players, strategy sets, information sets, timing of moves, payoffs; normal (also called matrix or strategic) and extensive forms; beliefs, mixed strategies, and expected utility (Chs. 1 through 5, 14, and 16)
  2. Dominance, efficiency, best response, iterated elimination of strongly dominated strategies (IESDSE), rationalizability (Chs. 6 through 8)
  3. Congruous sets, Nash equilibria, mixed strategy Nash equilibrium, various examples (Chs. 9 through 11)
  4. Contracts, third party enforcement, and cooperative game theory (Ch. 13)
  5. Backward induction, games of perfect and imperfect information, subgame perfection, principle-agent games, incentive compatibility, individual rationality (Chs. 15, 16 and last part of 25)
  6. Bargaining, holdup, and organization (Chs. 18 through 21)
  7. Repeated games, self-enforcing collusion, reputation (Chs. 22 and 23)
  8. Incomplete information, asymmetric information, Bayesian Nash equilibrium and conditional rationality, the market for lemons, auctions (Chs. 25 and 26)
  9. Sequential rationality, Perfect Bayesian equilibrium (PBE), job-market signalling and education, pooling and separating equilibria (Chs. 28 and 29)