Microeconomics III (p)

Course content

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.

Education

MSc programme in Economics – mandatory course at first semester - if not passed before.

 

Bacheloruddannelsen i økonomi – Prioriteret valgfag på 3. år (angivet med et p).

The Danish BSc programme in Economics - prioritized elective at the 3rd year (symbolized by ‘p’).

 

The course is open to:

  • Exchange and Guest students from abroad
  • Credit students from Danish Universities
  • Open University students
Learning outcome

After completing the course the student is expected to be able to:

 

Knowledge:

  • 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.

 

Skills:

  • 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.

 

Competencies:

  • 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 discussed.

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

Schedule:

Autumn 2023
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).

Spring 2024:
3 hours lectures a week from week 6 to 20.
3 hours exercise classes a week from week 6/7 to 20/21.

Written
Oral
Individual
Collective

 

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.

ECTS
7,5 ECTS
Type of assessment
Written examination, 3 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.
Aid

No aids allowed at the written ITX-exam.

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)

  • Category
  • Hours
  • Lectures
  • 42
  • Class Instruction
  • 42
  • Preparation
  • 120
  • Exam
  • 2
  • English
  • 206

Kursusinformation

Language
English
Course number
AØKA08005U
ECTS
7,5 ECTS
Programme level
Full Degree Master
Bachelor
Duration

1 semester

Placement
Autumn And Spring
- Go to 'Signup' for information about registration and enrollment.
Price

Information about admission and tuition fee:  Master and Exchange Programme, credit students and guest students (Open University )

Schedulegroup
and venue:
- For teaching: Go to 'Remarks'.
- For exam and re-sits: Go to 'Exam'.
Studyboard
Department of Economics, Study Council
Contracting department
  • Department of Economics
Contracting faculty
  • Faculty of Social Sciences
Course Coordinator
  • Julia Salmi   (11-747f76736b387d6b7677734a6f6d797838757f386e75)
Saved on the 22-05-2023

Are you BA- or KA-student?

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Courseinformation of students