It starts the first tango

From the next lecture we will move to game theory. The 7th lecture, to be held on May 7th, 2-5 pm, will introduce the notion and elements of a game (MWG 7), simultaneous games with perfect information (MWG 8.A-D), and, if we have time, correlated equilibrium (F-T 2.2).

This clip will help you appreciate the importance of information in game theory. It points to a key assumption in almost all games. (Try to identify which one!) If you know something about games under imperfect information, modeling that situation is a good exercise.

Slides are here. Suggested exercises are here.

Those who will present

Should have received my email about the preliminary ideas of presentations, including when and what. Please write to me IMMEDIATELY if either you have told me before the deadline that you wanted to present but haven't not yet received the email, or you didn't say you want to participate but got the message. Please note that I won't be here next week, so email is the only way to contact me.

In this capricious world

The second part of the course will be concerned with choice under uncertainty and game theory. In the 6th lecture, to be held on April 30, 2-5 pm, I will cover uncertainty theory, including expected utility theory, risk attitude, stochastic dominance, and, if time allows, state-dependent utility. Please read MWG 6.B-E.

Slides are here.

Suggested exercises are here.

Office hour April 17 canceled

Due to some emergency, I won't be able to stay in office, or Lucca today. Sorry about the last minute announcement...

The first time they meet

The 5th lecture, to be held on April 16 from 2-5pm, will be the first time we encounter the magic word in economics: equilibrium. We will bring together supply and demand under the partial equilibrium framework. We will cover two market structures, perfect competition and monopoly, each with specific topics.

Under perfect competition, we will pay attention to its welfare property, especially the First Fundamental Theorem of Welfare Economics. For monopoly, if we have more time to talk about more than (simple) monopoly pricing, we'll also discuss price discrimination and durable goods monopoly (Coase conjecture). Please read MWG 10.B-F for the perfect competition part, MWG 12.B for monopoly pricing, V 14 for price discrimination, and Chp 1 of Tirole's IO book for durable goods monopoly.

Slides are here.

Exercises are here.

A break, well, not really...

Because of this week's tight schedule, I will not post suggested exercises until Thursday or Friday. If you need something fun to do, MWG surly will not disappoint you.

Something old something new

The 4th lecture, to be held on April 15, 2-5pm, will be devoted to producer theory. The same optimization approach as in consumer theory will be applied to what we call "neoclassical firms."

I will mention very quickly common results (profit optimization and cost minimization), and spend more time on what we didn't do in consumer theory (comparative statics with calculus) and issues specific to firms (short-run and long- run). Please read MWG 5.B-D. Varian Ch 1-6 are also useful. If you have more time, you can take a look of Separation Hyperplane Theorem (MWG M.G.2).

Slides are here.

Suggested exercises are here.

Let's speed up

From first week's reaction during the class and quiet office hours, it seems that we can "raise the bar" and proceed more quickly. So I'll modify the plan and finish producer theory in one lecture. Game theory will take all the saved time as well as presentations, if any.

The new contents for each lecture are therefore:

Lecture 3 - applications of consumer theory

Lecture 4 - producer theory

Lecture 5 - perfect competition and monopoly

Lecture 6 - choice under uncertainty

Lecture 7 to 10 - game theory

Office hour April 17

You can sign up here with your questions.

and practical

A change of time: The third lecture will be held on April 14, 10am-1pm, instead of the originally scheduled April 15.

To finish our discussion of consumer theory, I will focus on two applications of the theory we've learned, including welfare analysis (MWG 3.I), and endowments as well as labor supply (V 9).

If we have more time, I'll speak shortly about integrability (MWG 3.H) and revealed preference (MWG 1.C and 2.F).

Slides are here.

Suggested exercises are here.

Now let's get something real

The second lecture will be held on April 10, 10am-1pm. I will talk about consumer's utility maximization, expenditure minimization, and duality. Please read MWG 3.D, E, and G. Slides are here.

Suggested exercises are here.

If you want to present

You can sign up here. The registration deadline is April 18.

Office hours April 10

Those who intend to come, please sign up with your questions (if any). I will update here the contents after receiving your responses.

Where it all begins

The first class will be held on April 8, 2-5pm. You are going to hear something about me, the course, and consumer preferences and constraints.

I will distribute syllabus, handout (introduction and the basic elements of consumer theory), and exercises. Please, if you have the book, read MWG 1.B, 2.B-D, 3.B, and 3.C before going to the class.