Lecture Readings and Assignments

 

 Week 1 (10/26- 10/30)
Topic: A partial equilibrium introduction to general equilibrium. Competitive equilibrium
and Pareto optimality. The fundamental welfare theorems and welfare analysis in a partial equilibrium context.
Readings: MWG 10
Problem Set 1 (due Thu Nov 12) Answer key

Week 2 (11/2 - 11/6)
Topic: Imperfect competition: monopoly, oligopoly (Bertrand, Cournot).
Readings: oligopoly handout, MWG 12A-C (game theory treatment, you will see 12C and E in econ 713)
 

Topic: Non-optimality of competitive equilibrium: externalities and public goods. The Coase theorem.
Readings: MWG 11A-C, 11-D is optional but interesting

 

Week 3 (11/9 - 11/13)
Topic: General equilibrium. Basic definitions. Exchange and production economies.

2-person economies: the Edgeworth box for exchange economies. Application: The 2x2 production model.
Readings: MWG 15
 

Topic: The Welfare theorems.
Readings: MWG 16A-D
Problem Set 2  (due Tue Nov 24)

 

Week 4 (11/16 - 11/20)

Topic: The Welfare theorems continued.
Readings: MWG 16A-D

 

Topic: Conditions for Pareto optimality. Bergson-Samuelson social welfare functions. Mathematical theorems for equilibrium existence.
Readings: MWG 16E-F, MWG math appendix M.H-M.I
 

Week 5 (11/23 - 11/27)

Topic: Existence of General equilibrium in exchange economies.
Readings: MWG 17A-C

Problem Set 3  (due Thu Dec 11)

 

Week 6 (11/30 - 12/4)

Topic: Local uniqueness, Debreu-Sonnenschein-Mantel Theorem, Brown-Matzkin theorem. Gross substitutes.
Readings: MWG 17E-F, 17H

 

Topic: General equilibrium under uncertainty. Arrow-Debreu equilibrium. Radner equilibrium.
Readings: MWG 19A-D 

 

Week 7 (12/7 - 12/11)

Topic: Foundations of general equilibrium: the core. Externalities and the Coase theorem revisited: the empty core.
Readings: MWG 18A-B; Aivazian and Callen, The Coase Theorem and the empty core (JLE 1981);

Optional reading: Shapley and Shubik, On the core of an economic system with externalities  (AER 1969)

Topic: Social choice. Social welfare functions. Arrow’s impossibility theorem. Gibbard-Satterthwaite theorem.
Readings: MWG 21A-C; Geanakoplos, Three brief proofs of Arrow's impossibility theorem (Cowles disc. paper 2001);

Optional reading: Reny, Arrow's theorem and the Gibbard-Satterthwaite theorem: a unified approach (Mimeo 2000)

Week 8 (12/14 - 12/18)
Topic: Social choice continued.

FINAL EXAM: Sat 12/19, 9-12:00 (room TBA)