Course outline for Economics 326: Advanced Economic Theory---Micro

Page last modified 2008-8-25

Course outline for Economics 326: Advanced Economic Theory---Micro

Fall 2008

Mondays 2:10-4:00. Tutorial after each class except the first and the day of the midterm, 4:10-5:00.

Course website: http://www.economics.utoronto.ca/osborne/326

This course covers the theory of games, a set of tools used widely in economics to study situations in which decision-makers (consumers, firms, politicians, governments, ...) interact. Game theory dominates contemporary economic theory and is used in many other disciplines, including political science, sociology, and biology. A variety of economic applications will be discussed.

Text

The text for the course is my book

An introduction to game theory (Oxford University Press, New York, 2003)

Another book that covers many, but not all of the topics in the course, at approximately the same level, is

R. Gibbons, Game theory for applied economists (Princeton University Press, 1992)

Prerequisites

The prerequisites for the course are ECO200Y(70%)/204Y(70%)/206Y, ECO220Y(70%)/227Y/STA247H((70%),248H(70%))/(250H(70%),255H(70%))/(257H,261H); MAT133Y(63%)/(123H(63%),124H(63%))/135Y(60%)/137Y(55%)/157Y(55%). Recommended preparation is MAT223H/240H, MAT235Y/237Y/ECO210H.

Outline

Introduction (week 1): Chapter 1
Nash equilibrium: theory (weeks 1-2): Chapter 2
Nash equilibrium: illustrations (weeks 3-4).: Chapter 3
Mixed strategy equilibrium (weeks 4 and 5): Chapter 4
Term test (week 6 [October 20])
Extensive games (week 7): Chapter 5
Extensive games: illustrations (week 8): Chapter 6
Bargaining (week 9): Chapter 16
Bayesian games (weeks 10-11): Chapter 9
Extensive games with imperfect information (week 12): Chapter 10

Evaluation

Your grade in the course will be based on your marks in a midterm test and a final exam.

Problem sets

As with any analytical subject, the only way to learn the material in this course is to do lots of problems! I will assign problems each week. Your answers to these problems will not contribute directly to your grade (the problems will not be marked), but it will be very difficult to pass the course if you don't do the problems. The problems will be discussed, on demand, by the TA in the tutorial sessions.

Midterm exam

The midterm test will be held on Monday October 20 from 2:10pm to 4:00pm, in a room to be announced. It will receive a weight of 40% in the final grade.

Final exam

The final exam will receive a weight of 60% in the final grade. It will cover the entire term's work.

Redemption

A low but passing mark in the midterm test will be redeemable by a high mark on the final exam, and a mark between 40% and 50% on the midterm test will be partly redeemable. Specifically, if your mark on the midterm test is at least 50% and is lower than your mark on the final exam, the 40% weight for the test will be transferred to the final exam. If your mark on the midterm test is between 40% and 50% and is lower than your mark on the final exam, the midterm test mark, say x, will receive a weight of 4(50

x)% and the weight 40

4(50

x)% will be transferred to the final exam. (For example, if you score 45% on the midterm test, then that test will receive a weight of 20% and the remaining 20% of the weight for the test will be transferred to the final exam.) If you do not take the midterm test or if you receive a mark of 40% or less, no weight for the test will be transferred to the final exam. For example, if your mark on the midterm is 60 and your mark on the final exam is 80, your mark for the course will be 80, but if your mark on the midterm is 40 and your mark on the final exam is 80, your mark for the course will be 64 (0.4 times 40 plus 0.6 times 80).

No calculators will be permitted in the term test or in the final exam.

If you miss the midterm test for a valid medical reason, you need to give to me an official U of T medical form completed by a doctor. You need to give me the form within two days of the date the form says you will be well again, or within a week of the missed test, whichever comes first. You must contact me to arrange a makeup test, which you will normally have to take within three days of the date the medical certificate says you will be well.

Contacting me

Office: 5016B, Sidney Smith.
E-mail address: Consult this page. You can reduce the chance your message is deleted as spam by using a utoronto.ca address, making your real name the sender, and including "Eco 326" in the subject. You should sign your message with your real name.
Office hours: Wednesdays 10:10am-12:00pm.