Microeconomics III (p)
This course furthers the introduction of game theory and its applications in economic models. The student who successfully completes the course will learn the basics of game theory and will be enabled to work further with advanced game theory. The student will also learn how economic problems involving strategic situations can be modeled using game theory, as well as how these models are solved. The course intention is that the student becomes able to work with modern economic theory, for instance within the areas of industrial organization, macroeconomics, international economics, labor economics, public economics, political economics and financial economics.
In the process of the course the student will learn about
- Static games with complete information,
- Static games with incomplete information,
- Dynamic games with complete information,
- Dynamic games with incomplete information,
The first part of the course is devoted to static games with complete information. This part of the course extends the initial treatment of the subject from Microeconomics II (Mikroøkonomi II). The concept of a normal form game and solution concepts such as dominance and Nash Equilibrium are reintroduced in a formally rigorous way. Students will also study a variety of economic applications of the theory. Finally, they will look more deeply into the theory of static games with complete information by studying mixed strategies and mixed-strategy Nash equilibria, and discussing equilibrium existence.
The second part of the course extends the treatment of dynamic games with complete information. The students will learn this theory in a more rigorous way and discuss various economic applications. The students will then study games with imperfect information and repeated games. They will be introduced to extensive form games, and will learn about the relevant refinement of the Nash equilibrium concept: subgame-perfect Nash equilibrium. Again, the theory will be illustrated by economic applications.
In the third part of the course the students will study simultaneous games of incomplete information. They will learn about the concept of Bayesian Nash equilibrium and apply their knowledge to different kinds of auctions, mechanism design problems, and other applications.
The fourth part of the course is devoted to dynamic games of incomplete information. The students will analyze the implications of introducing sequential moves into the games with incomplete information. They will gain knowledge of the Perfect Bayesian Equilibrium and its refinements, and will apply the theory to signaling games and other relevant economic problems. In particular, they will look into the job-market signaling model of Spence and other asymmetric information models.
After completing the course the student is expected to be able to:
- Formally state the definition of a game and explain the key differences between games of different types (static games of complete information, static games of incomplete information, dynamic games of complete information, and dynamic games of incomplete information).
- In detail account for the equilibrium (solution) concepts that are relevant for these games (Nash Equilibrium, Subgame Perfect Nash Equilibrium, Bayes-Nash Equilibrium, Perfect Bayesian Equilibrium).
- Identify a number of special games and particular issues associated with them, such as repeated games (including infinitely repeated games), auctions and signaling games.
- Explicitly solve for the equilibria of these games.
- Explain the relevant steps in the reasoning of the solution.
- Interpret the outcomes of the analysis.
- Apply equilibrium refinements and discuss the solution concepts
- Evaluate and debate the crucial assumptions underlying the theory.
- Analyze strategic situations by modeling them as formal games.
- Set up, prove, analyze and apply the theories and methods used in the course in an independent manner.
The teaching will consist of lectures, as well as exercise
classes. While the lectures will discuss and put perspectives on
the curriculum, the exercise classes will focus on exercises and
applications of the theory. Some relevant experiments will be
Changes to teaching methods due to a pandemic crisis:
The teaching in this course might be changed to either fully or partly online due to a pandemic crisis. If changes are implemented please read the study messages at KUnet or the announcements in the virtual course room on Absalon (for enrolled students).
Syllabus: Spring 2022:
- Robert Gibbons. A Primer in Game Theory. Prentice Hall 1992.
- Some short additional materials (can be downloaded from Absalon)
Syllabus: Autumn 2021:
- Robert Gibbons. A Primer in Game Theory. Prentice Hall 1992. (The book is not mandatory to have. Lecture slides and other free online material can be used instead).
- Some short additional materials (can be downloaded from Absalon)
The course requires knowledge equivalent to that achieved in Microeconomics I and Microeconomics II at the Bachelor of Economics, University of Copenhagen
3 hours lectures a week from week 36 to 50 (except week 42).
3 hours exercise classes a week from week 36/37 to 50 (except week 42).
3 hours lectures a week from week 6 to 20.
3 hours exercise classes a week from week 6/7 to 20/21.
The overall schema for the BA 3rd year and Master can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
BA i Økonomi/KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"
Timetable and venue:
To see the time and location of lectures and exercise classes please press the link/links under "Timetable"/"Se skema" at the right side of this page (E means Autumn, F means Spring). The lectures are shown in each link.
You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E22; [Name of course]” or “2200-F23; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Efterår/Autumn” or “Forår/Spring”
Press: “ View Timetable”
Please be aware:
- The study administration allocates the students to the exercise classes according to the principles stated in the KUnet.
- If too many students have wished a specific class, students will be registered randomly at another class.
- It is not possible to change class after the second registration period has expired.
- If there is not enough registered students or available teachers, the exercise classes may be jointed.
- The student is not allowed to participate in an exercise class not registered.
- The teacher of the exercise class cannot correct assignments from other students than the registered students in the exercise class except with group work across the classes.
- All exercise classes are taught in English and it is expected that the students ask questions in English, so foreign students are included in the dialog.
- The schedule of the lectures and the exercise classes can change without the participants´ acceptance. If this occur, you can see the new schedule in your personal timetable at KUnet, in the app myUCPH and through the links in the right side of this course description and at the link above.
- It is the students´s own responsibility continuously throughout the study to stay informed about their study, their teaching, their schedule, their exams etc. through the curriculum of the study programme, the study pages at KUnet, student messages, the course description, the Digital Exam portal, Absalon, the personal schema at KUnet and myUCPH app etc.
The teaching assistants give the students individual, written feedback for three mandatory assignments. The lecturer gives collective oral feedback for quizzes and games played during the lecture.
- 7,5 ECTS
- Type of assessment
Written examination, 2 hours under invigilation
- Type of assessment details
- ITX-exam in the exam venues of the university.
The exam assignment is in English and must be answered in English.
Changes to the exam due to a pandemic crisis:
In the event that restrictions from a pandemic crisis may affect the conduction of the ITX-exams, the written exam and the re-sit exam will change to a 2 hours written take-home exam. The changes will be announced in study messages at KUnet and in Digital Exam.
The take-home exam is an individual exam and it is not allowed to communicate with any one about the exam assignment nor the solution at all. It is also prohibited to distribute data and other information at all. If this or alike actions happens, it will be regarded as cheating and plagiarism.
No aids allowed at the written ITX-exam.
If the ITX-exam changes to a take-home exam due to a pandemic crisis, the written take-home exam is with all aids.
- Marking scale
- 7-point grading scale
- Censorship form
- No external censorship
for the written exam. The written ITX-exam may be chosen for external assessment by random sample.
Criteria for exam assessment
Students are assessed on the extent to which they master the learning outcome for the course.
In order to obtain the top grade “12”, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.
In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of the knowledge, skills and competencies listed in the learning outcomes.
Single subject courses (day)
- Class Instruction
- Course number
- 7,5 ECTS
- Programme level
- Full Degree Master
- Autumn And Spring
- Go to 'Signup' for information about registration and enrollment.
Information about admission and tuition fee: Master and Exchange Programme, credit students and guest students (Open University )
- For teaching: Go to 'Remarks'.
- For exam and re-sits: Go to 'Exam'.
- Department of Economics, Study Council
- Department of Economics
- Faculty of Social Sciences
- Johan Lagerlöf
- Christina Gravert
- Nick Vikander
See 'Course Coordinators'
Teachers of exercise classes:
Ex. class 1:
Ex. class 2:
Ex. class 3:
Please read "Remarks" regarding the schedule of the teaching.
- 22E-;Ex.class 1;;Microeconomics III
- 22E-;Ex.class 10;;Microeconomics III
- 22E-;Ex.class 2;;Microeconomics III
- 22E-;Ex.class 3;;Microeconomics III
- 22E-;Ex.class 4;;Microeconomics III
- 22E-;Ex.class 5;;Microeconomics III
- 22E-;Ex.class 6;;Microeconomics III
- 22E-;Ex.class 7;;Microeconomics III
- 22E-;Ex.class 8;;Microeconomics III
- 22E-;Ex.class 9;;Microeconomics III
Are you BA- or KA-student?
Courseinformation of students