Reading List - University of Toronto Scarborough

ECMD13: Advanced Microeconomic TheoryReading ListJim Campbelljcampbell@utsc.utoronto.caThe following is a suggested reading list for ECMD13. Each topic in this course could rightlyform a full course on its own right, and so this reading list is both extensive and vastlyincomplete. You do not have to read everything on this list! My favorites are marked with anasterisk.This list is designed to go beyond each week’s required reading (assigned in lecture). To bestprepare you for writing essays in your exams I encourage you to read more when you areinterested, even if it’s just to skim an article to get an idea of it. I encourage you also to feel freeto read outside this list and to draw on a breadth of sources in your research. The referenceswithin these references are one good place to dig deeper.Note that many of these references are primary sources in the economics literature and so canbe quite technical. A good way to approach your reading is to use my lecture notes and thetextbooks to understand the basics, and to tackle the literature with the goal of understandingthe logic, argument and approach of the authors rather than the mathematical and technicaldetails.Google Scholar should help you to find many of the journal articles listed below. If you havedifficulty finding anything, let me know and I will help.General textbooks Freely available:Rubinstein, A., Lecture Notes in Microeconomic Theory,http://arielrubinstein.tau.ac.il/Rubinstein2007.pdf, updated 2010 [Topic 1]Tian, G., Lecture Notes in Microeconomic Theory, http://econweb.tamu.edu/tian/micro1.pdf,updated 2010 [Comprehensive but pitched at a high-level]Osborne, M. and Rubinstein, A., A Course in Game Theory,http://theory.economics.utoronto.ca/books/index.php/index, 1994 [Register todownload; refer to this for our game theory section] To buy or reference if you wantMas-Colell, A., Whinston, M.D. and Green, J.R., Microeconomic Theory, Oxford UniversityPress, 1995 [Canonical graduate-level text]Rasmusen, E., Games and Information: An Introduction to Game Theory (4th edition), Wiley-Blackwell, 2006 [Highly recommended. Excellent, readable overview of game theory,good for Topics 4 and 5. 3rd edition is fine.]Varian, H., Intermediate Microeconomics: A Modern Approach (9th edition), W.W. Norton andCompany, 2009 [Gives good foundation for all topics. This is just the most recent edition,you may be able to find previous editions more easily]Varian, H., Microeconomic Analysis (3rd edition), W.W. Norton and Company, 1992[Continuation of the above. Concise exposition of many topics]

Introduction and methodology* Cochrane, John H. (2005), “Writing Tips for Ph.D. Students”,http://faculty.chicagobooth.edu/john.cochrane/research/Papers/phd_paper_writing.pdf* Friedman, M. (1966), “The Methodology of Positive Economics”, in Essays In PositiveEconomics (Chicago: Univ. of Chicago Press), pp. 3-16, 30-43.* Krugman, P. (1997), “The Accidental Theorist”,http://web.mit.edu/krugman/www/hotdog.htmlPopper, K., “Science: Conjectures and Refutations”, in Philosophy of Science: The CentralIssues, Martin Curd and J.A. Cover, eds., W.W. Norton and Company, 1998, pp. 3-10.Samuelson, P. (1948), Economics, Chapter 1: Introduction [Search for “Economics: The Original1948 Edition” at amazon.com and click `look inside’ to read chapter 1]Individual decision-making* Kahneman, D., Knetsch, J.L. and Thaler, R.H. (1991), “Anomalies: The Endowment Effect, LossAversion, and Status Quo Bias”, The Journal of Economic Perspectives, 5(1): 193-206* Pesendorfer, W. (2006), “Behavioral Economics Comes of Age: A Review Essay on ‘Advancesin Behavioral Economics’”, Journal of Economic Literature, 44(3): 712-721* Rubinstein, A., Modeling Bounded Rationality, MIT Press, 1998, available freely athttp://arielrubinstein.tau.ac.il/br/br.pdf [Chapter 1 important; 2-5 worth looking at]DellaVigna, S. and Ulrike Malmendier (2006), “Paying Not to Go to the Gym” AmericanEconomic Review, 96(3): 694–719.Kahneman, D. and Thaler, R.H. (2006), “Anomalies: Utility Maximization and Expected Utility”,The Journal of Economic Perspectives, 20(1): 221-234Kahneman, D. and Tversky, A. (1979), “Prospect Theory: An Analysis of Decision under Risk”,Econometrica, 47(2): 263-292Laibson, D. (1997), “Golden Eggs and Hyperbolic Discounting,” Quarterly Journal of Economics,112(2): 443-478.O’Donoghue, T. and Rabin, M. (1999), “Doing It Now or Later”, American Economic Review,89(1):103-124Palacios-Huerta, I. and Serrano, R. (2006), “Rejecting small gambles under expected utility”,Economics Letters, 91(2): 250-259Rabin, M. and Thaler, R.H. (2001), “Anomalies: Risk Aversion”, The Journal of EconomicPerspectives, 15(1): 219-232.Rubinstein, A., (2001), “Comments on the Risk and Time Preferences in Economics”, Mimeo,Tel-Aviv UniversityRubinstein, A. (2003), “Economics and Psychology? The case of Hyperbolic Discounting,”International Economic Review, 44(4): 1207-1216Schoemaker, P.J.H. (1982), “The Expected Utility Model: Its Variants, Purposes, Evidence andLimitations”, Journal of Economic Literature, 20(2): 529-563Sen, A.K. (1977), “Rational Fools: A Critique of the Behavioral Foundations of EconomicTheory”, Philosophy and Public Affairs, 6(4): 317-344Thaler, R.H. (1988), “Anomalies: The Ultimatum Game”, The Journal of Economic Perspectives,2(4): 195-206

Strategic interaction (game theory)* Gibbons, R. (1997), “An Introduction to Applicable Game Theory”, The Journal of EconomicPerspectives, 11(1): 127-149* Palacios-Huerta, I. (1996), “Professionals Play Minimax”, Review of Economic Studies, 70(2): 395-415* Thaler, R.H. (1988), “Anomalies: The Winner’s Curse”, The Journal of Economic Perspectives, 2(1):191-202Axelrod, R. (1980), “Effective Choice in the Prisoner’s Dilemma”, Journal of Conflict Resolution,24(1): 3-25Bosch-Domènech, A., Montalvo, J.G., Nagel, R. and Satorra, A. (2002), “One, Two, (Three),Infinity, ... : Newspaper and Lab Beauty-Contest Experiments”, American EconomicReview, 92(5): 1687-1701Cho, I-K. and Kreps, D.M. (1987), “Signaling Games and Stable Equilibria”, The Quarterly Journalof Economics, 102(2): 179-221Dal Bó, P. (2005), “Cooperation under the Shadow of the Future: experimental evidence frominfinitely repeated games”, American Economic Review, 95(5): 1591-1604Fehr, E. and Gächter, S. (2000), “Fairness and Retaliation: The Economics of Reciprocity”, TheJournal of Economic PerspectivesKandori, M. (1992), “Social Norms and Community Enforcement”, The Review of EconomicStudies, 59(1): 63-80Kovash, K. and Levitt, S.D. (2009), “Professionals Do Not Play Minimax: Evidence from MajorLeague Baseball and the National Football League”, MimeoKreps, D.M., Milgrom, P., Roberts, J. and Wilson, R. (1982), “Rational Cooperation in theFinitely Repeated Prisoners’ Dilemma”, Journal of Economic Theory, 27(2): 245-252Kreps, D.M. and Wilson, R. (1982), “Reputation and Imperfect Information”, Journal of EconomicTheory, 27(2)Myatt, D.P., Shin, H.S. and Wallace, C. (2002), “The Assessment: Games and Coordination”,Oxford Review of Economic Policy, 18(4): 397-417Myerson, R.B. (1999), “Nash Equilibrium and the History of Economic Theory”, Journal ofEconomic Literature, 37(3), 1067-1082Selten, R. (1975), “The Chain Store Paradox”, Theory and Decision, 9(2): 127-159Information* Akerlof, G.A. (1970), “The Market for “Lemons”: Quality Uncertainty and the MarketMechanism”, The Quarterly Journal of Economics, 84(3): 488-500* Farrell, J. and Rabin, M. (1996), “Cheap Talk”, The Journal of Economic Perspectives, 10(3): 103-118* Spence, M. (1973), “Job Market Signaling”, The Quarterly Journal of Economics, 87(3): 355-374Crawford, V.P. and Sobel, J. (1982), “Strategic Information Transmission”, Econometrica, 50(6):1431-1451Diamond, P.A. (1971), “A Model of Price Adjustment”, Journal of Economic Theory, 3(2): 156-168Lazear, E.P. (2000), “Performance Pay and Productivity”, American Economic Review, 90(5): 1346-1361Klein, B. and Leffler, K.B. (1982), “The Role of Market Forces in Assuring ContractualPerformance”, The Journal of Political Economy, 89(4): 615-641