Economics 3102  Yossi Spiegel 

Course Description: The
course is the second of a twopart sequence in intermediate microeconomics.
The first part of the course deals with the strategic behavior of oligopolistic
firms that have some but not full market power. To study the behavior of
such firms we will first introduce some basic concepts in noncooperative
game theory and will then use these concepts to characterize the equilibrium
that arises in oligopolistic markets. The second part of the course
deals with general equilibrium in pure exchange and in production economies
when all markets are competitive. Finally, the last part of the course
deals with two important instances of "market failure:" externalties and
public goods.
Prerequisites: Students should have successfully completed Economics 3101, and, at the minimum, Mathematics B141 (Differential Calculus). I will use calculus throughout the course as this is an extremely useful tool for economic analysis. It is therefore very important that you feel comfortable solving optimization problems. In addition to calculus I will also use graphical presentation to illustrate the main ideas and will emphasize the general logic and intuition behind the results. Office hours: I will be happy to answer any questions you may have about the material immediately after class. Textbook: The text book for this course is Microeconomics: An Integrated Approach by David Besanko and Ronald Braeutigam (B&R). Apart from Besank and Braeutigam's
textbook there are other good textbooks around that you can use for this
course. In particularly, you can also consult
Handouts and other material:
Evaluation: Evaluation will be based on a final exam (2/3 of the final grade) and one midterm exam (1/3 of the final grade).
Problem Sets: Although no credit is given to the problem sets it is extremely important that you try to solve them (even if you are not successful, the process of thinking about the problem and working on it is vital for understanding the material). 


The tentative plan for the course* 
Week  Topic  Readings from Besanko and Braeutigam (B&R)  Problems 
Week 1  A brief introduction to noncooperative game theory  Ch. 14.1  Problems 14 in Ch. 14 in B&R
(Game Theory and Strategic Behavior) Topic 1

Week 2  Static models of Oligopoly behavior: Cournot and Bertrand  Ch. 13.113.2, 13.4  Problems 15 in Ch. 13 in B&R
(Market Structure and Competition)
Topic 2: problems 15

Week 3  More noncooperative game theory: games in extensive form  Ch. 14.3  Problems 1011 in Ch. 13 in B&R
(Market Structure and Competition)
Topic 2: problems 67

Week 4  The Stackelberg model, monopolistic competition  Ch. 13.5  Problem 7 in Ch. 14 in B&R (Market
Structure and Competition)
Topic 3



Week 5  GE in pure exchange economies: Edgworth box and Pareto Efficiency  Ch. 16  Problems 57 in Ch. 16 in B&R
(General Equilibrium Theory)
Topic 4 
Week 6  GE in pure exchange economies: Walrasian equilibrium and the welfare theorems  Ch. 16  
GE in production economies  Ch. 16  Problems 14 and 89 in Ch. 16 in
B&R
Topic 5 

Week 7  Externalities  Ch. 17.1  Problems 14 and 7,8, 10,
and 11 in Ch. 17 in B&R
Topic 6: problem 1 
Week 8  Public goods  Ch. 17.2  Topic 6: problems 23 
Final Exam  
* An important remark: the plan for the course is only tentative. It is very likely that during the quarter some changes and adjustments will have to be made. 
Last updated: June 2008 