Aggiornato A.A. 2021-2022
Presentation
Microeconomics II deals with modelling strategic interactions among rational agents using logico-mathematical approach. Relevant economic examples of such interactions concern competition among firms, conflicts among nations, auctions and trading behavior in stock markets. The course tackles non-cooperative game theoretic analysis both for strategic and extensive form game. It deals with complete and incomplete informaiton settings and uses various examples that are framed in classical economic applications.
Programme of the course
Static games of complete Information: main solution concepts. Existence theorems.
Applications: models of imperfect competition.
Dynamic games of complete information. Representation through extensive form and backward induction. Subgame perfection.
Introduction to repeated games. Applications: bargaining models.
Games of incomplete information and Bayesian equilibria.
Applications: auctions, oligopoly models with incomplete informaion.
Adverse selection. Applications: Competitive screening and signalling in the labor market.
Moral hazard. Application: Strategic default in financial markets and/or credit rationing.
Main references
Gibbons R., “A Primer in Game Theory”, 1992, Pearson Education Limited.
Osborne M.J., "An Introduction to Game Theory", Oxford University Press.
Mas Colell A., Whinston M., and J. Green “Microeconomic Theory” , 1995, Oxford University Press.
Additional material provided during lectures.
Pre-requisites: Notions of Mathematics and Probability. Microeconomics.
Knowledge and Understanding
The course provides the fundamental instruments to analyse strategic interactions that often appear in the contemporary economic debate. Students will be exposed to logico-mathematical thinking and rigorous development of line of thoughts. At the end of the course, students will have acquired a good knowledge of non-cooperative game theory.
Prof.ssa Lucia Leonelli
