Economics 713: Microeconomic Theory
Spring 1999
1-2:15, 6116 Social Science; and 2:30-3:45, 6112 Social Science
John Kennan, 6438 Social Science,
jkennan@macc.wisc.edu
Office Hours: Monday, 2-3:30
TA: Phil Cross, 6415 Social Science, pjcross@students.wisc.edu
This course is the last module in the basic microtheory
sequence. It has two objectives. First, the review of basic tools
will be completed: by the end of the semester you should have
been exposed to all of the standard techniques of microeconomics.
Second, the course will attempt to present some applications that
illustrate how some of these techniques are actually used.
Main Text:
Microeconomic
Theory, by Andreu Mas-Colell, Michael D. Whinston, and Jerry
R. Green, Oxford University
Press, 1995.
Supplementary Texts
Myerson, Roger B. Game Theory, Cambridge: Harvard
University Press, 1991.
Gibbons, Robert, Game Theory for Applied Economists,
Princeton: Princeton University Press, 1992.
There will be weekly problem sets,
on assorted topics, including some that may be related to the
material being covered in class.
Topics:
- Principal-Agent Models.
- Text, Chapter 14.
- Application: Affirmative Action
- Coate, Stephen and Glenn C. Loury, "Will
Affirmative Action Policies Eliminate Negative
Stereotypes?" American Economic
Review, 83, December 1993, 1220-40.
- Arrow's Impossibility Theorem.
- Text, Chapter 21.
- Trade.
- Text, Chapter 15D.
- Humphrey, Thomas M., "
The Early History of the Box Diagram "
Federal Bank of Richmond Economic Quarterly,
Winter 1996, 37-75.
- Welfare Economics. Text, Chapter 22.
- Application: Product Diversity
- Dixit, Avinash K. and Joseph E. Stiglitz, "Monopolistic
Competition and Optimum Product Diversity,"
American Economic Review, 67, No. 3. (June,
1977), 297-308.
- Application: Bargaining
- Text, 22.E
- Coase, Ronald H., "Durability and Monopoly",
Journal of Law and Economics, 1972, 15, 143-149.
- Kennan, John and Robert Wilson, "Bargaining
with Private Information," Journal of
Economic Literature, March 1993.
- Mechanism Design. Text, Chapter 23.
- Application: Lemons
Akerlof, George A, "The
Market for 'Lemons': Quality Uncertainty and the
Market Mechanism," Quarterly Journal of
Economics, 84,Aug., 1970, 488-500
- Application: Auctions
Bulow, Jeremy and John Roberts,
"The Simple Economics of Optimal Auctions"
The Journal of Political Economy, Vol. 97, No. 5. (Oct., 1989), pp. 1060-1090.
Grades:
There will be an exam just after the last class meeting (at a
time to be arranged). This exam counts for 70% of the grade, and
homework counts for 30%.