Schedule for ``Applied Microeconomics'' (G601) (Section 5742) (July 31, 2003)

Jean Tirole, The Theory of Industrial Organization, Cambridge: MIT Press, 1988.

Eric Rasmusen, Games and Information, Fourth Edition draft chapters, 2003. (I will hand these out)

Eric Rasmusen, The Games and Information Reader, Blackwell, 2001.

Packet I will also have other readings. G601 Reading Packet I will have Games and Information, up through Chapter 7, various articles. G601 Reading Packet II will have chapters 9 through 14. The packets will be available at Mr. Copy, corner of 10th Street and Dunn, 334-2679.

Basics

Instructor: Professor Eric Rasmusen. Office phone: 855-9219, after-hours: 855-3356. Office address: BU 456. Email: [email protected].
Web: http://pacioli.bus.indiana.edu/erasmuse/g601/g601.htm
Lecture room: CG 2069
Lecture times: Monday and Wednesday 2:30-3:45

Week 1:: 1 September, Monday. 1. Game Theory Basics
Rasmusen: Preface, Introduction, Chapters 1 and 2.; 3 September, Wenesday. 2. Mixed Strategies and Cournot Equilibrium
Rasmusen: Chapter 3. Reader: item 68, "Aphorisms".
Week 2: 8 September, Monday. 3. Classics-- big picture
Adam Smith
Joseph A. Schumpeter. "The Fundamental Problem of Economic Development," The Theory of Economic Development, tr. Redvers Opie, pp. 57-94 (Oxford: Oxford University Press, 1934, 1st edition in German, 1911).; 10 September, Wednesday. 4. Risk and Options
          Holly Wang (Washington State U.)
          Charles Moss (U. of Florida)
          Petrakis and Rasmusen.
          Rasmusen, options paper.
          Chapters 9 and 10 of Stephen LeRoy and Jan Werner, Principles of Financial Economics, 2001, Cambridge University Press.
Week 3: 15 September, Monday. 5. Finance; 17 September, Wednesday. 6. Dynamic Games
Rasmusen: Chapters 4, 5, and 6.
Week 4: 22 September, Monday. 7. Reputation
Rasmusen: Chapter 5. Reader: item 12, Lachman.; 24 September, Wednesday. 8. Classics: Public Policy
          George J. Stigler (1971) "The Theory of Economic Regulation" The Bell Journal of Economics and Management Science, Vol. 2, No. 1, pp. 3-21 (Spring 1971)
          David Friedman, Law's Order, 36-62, on the Coase Theorem and Calabresi-Melamed. (See http: //www.daviddfriedman.com/laws_order .)
          Arnold C. Harberger (1954) "Monopoly and Resource Allocation," The American Economic Review, Papers and Proceedings of the Sixty-sixth Annual Meeting of the American Economic Association, 44, 2: 77-87 (May 1954)
          I have posted my lecture notes and powerpoint slides on Stigler, Coase-Friedman, and Harberger.
Week 5: 29 September, Monday. 9. Moral Hazard
Rasmusen: Chapter 7. Reader: item 51, "The Argument of An Appeal".; 1 October, Wednesday. 10. The Principal Agent Problem
Rasmusen: Chapter 7.
Week 6: 6 October, Monday. 11. Tournaments and Teams
Rasmusen: Chapter 8.; 8 October, Wednesday. 12. Adverse Selection
Rasmusen: Chapter 9. Reader: item 27, "Starting Research Early"
Week 7: 13 October, Monday. 13. Mechanism Design
Rasmusen: Chapter 10.; 14 October, Tuesday. Review Session, TBA location to be named; 15 October, Wednesday. 14. Midterm.
Week 8: 20 October, Monday. 15. Price Discrimination
Rasmusen: Chapter 10. Reader: item 48, Hal Varian.; 22 October, Wednesday. 16. Signalling
Rasmusen: Chapter 11.
Week 9: 27 October, Monday. 17. Bargaining
Rasmusen: Chapter 12. Reader, item 44, "The Creation of New Mathematics"; 29 October, Wednesday. 18. Auctions
Rasmusen: Chapter 13 Reader, item 17, "The Conference Handbook"
Week 10: 3 November, Monday. 19. Cournot and Bertrand Oligopoly
Rasmusen: Chapter 14.; 5 November, Wednesday. 20. Location
Rasmusen: Chapter 14. Reader: item 7, "School of Genius"
Week 11: 10 November, Monday. 21. Durable Monopoly
Rasmusen: Chapter 14.; 12 November, Wednesday. 22. Classics: Organization
          Oliver Hart and Bengt Holmstrom. "A Theory of Firm Scope," November 4, 2002, MIT Department of Economics Working Paper No. 02-42. Notes here here.
          R. H. Coase (1937) "The Nature of the Firm," Economica, New Series, 4, 16: 386-405 (November 1937)
          Jacob Viner (1931) "Cost Curves and Supply Curves", Zeitschrift fur Nationalokonomie, 3: 23-46 (1931)
          An Excel spreadsheet illustrating Vinerian U-shaped cost curves. I have posted my lecture notes.
Week 12: 17 November, Monday. 23. The Theory of the Firm
Tirole: pp. 1-64.; 19 November, Wednesday. 24. Monopoly
Tirole: Chapter 1
Week 13: 24 November, Monday. 25. Marketing
Tirole: Chapter 2; 26 November, Wednesday. Thanksgiving. Holiday.
Week 14: 1 December, Monday. 26. Vertical Control
Tirole: Chapter 4; 3 December, Wednesday. 27. Short-Run Price Competition.
Tirole: Chapter 5
Week 15: 8 December, Monday. 28. Monopolistic Competition
Tirole: Chapter 7.; 10 December, Wednesday. 29. Vertical Differentiation
Tirole: Chapter 7.
Final Examination: To be arranged.

Return to the G601 Home Page.