EC202: Microeconomic Principles 2 2010/11 - DARP

Lectures, Reading and Classes: Second Term
Week Lecture topics Text Supplementary Weekly class work Hand-in
1 Game Theory: Strategic Form Games
Dominance and Pure Strategy Nash Equilibrium
2 Mixed Strategy Equilibria
Duopoly
3 Incomplete Information Games
Bayes Nash Equilibrium
C10.2, C10.3.1-4
O2.1, O2.6,
O2.8-9
C10.3.5, C10.4 O4.1-4, O3.1-2 9.6
9.2 , 9.3, 9.5
C10.7 O9.1-3 10.1,10.2, 10.3
4 Extensive Form Games and Dynamics C10.5 O5.1-4 10.4, 10.7.1-3,
10.17, O282.1
5 Imperfect Competition
Repeated Games
6 Folk Theorem
Adverse Selection: Monopoly
C10.5-6 O14, O15.1-2 10.7.4-5, 10.12,
O183.1-2
C10.5, C11.2 S2 10.13, 10.15.1-2
7 Adverse Selection: Competition C11.2 S3.1.3, S3.2.1 O442.1, O429.1,
10.15.3, 10.16
8 Signalling C11.3 S4, O10.5-6 11.1, 11.2
9 Moral Hazard C11.4 S5.1- 5.3.5 11.5, 11.6
10 Externalities & Public Goods C13.4, C13.6.1-4 O2.8.4, 9.5 11.8 13.5, 13.6 *
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Course Requirements
Classwork
Classes begin in the third week of the first term and continue into the third term.
• The work for each week consists of one or more exercises taken from the textbook and some of the “mini
problems” in the text chapters – see the schedule above. Answers to exercises will be posted on the website
throughout the year. You are expected to make a reasonable attempt at the classwork in advance of the class.
• You should also try to solve the other mini problems since they are designed to help you complete some of the
steps involved in the reasoning. Answers to the mini-problems are in Appendix B of the text.
• In weeks 4, 7 and 10 of each term written assignments are required: these assignments will be of the same scope
and difficulty as exam questions. You are expected to be diligent about meeting the deadlines for submission.
• Even though group work is encouraged on weekly assignments, we recommend that you do not discuss hand-in
problem sets with your peers prior to submission. Graded problem sets are meant to assess your individual
progress on the materials throughout the year and it is in your best interest to have such information to fill in
possible gaps.
Examination
There will be a single three-hour, four-question paper. The 2006-2010 papers (available in the Library) can be used
as general guidance to the style and level of difficulty. The 2011 paper will follow the format of the 2010 paper with
the exception that in 2011 there will be only three questions in section B and three questions in section C . The
principal features are:
• Question 1 (the compulsory question) is worth 40% of total marks.
• Question 1 requires candidates to answer 5 out of 8 parts.
• The three other questions are worth 20% each.
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