The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Naomi Utgo
MasColell Solutions
Chapter 1
Question 1.B.1. Prove that if
is rational then if x > y
z , then x > z.
Answer 1.B.1. (Proof by contradiction). Suppose x > y z and z x from some
x, y, z X. Then y
z
x; by transitivity, x
y , contradicting our ass
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Economics 2020b / API112 / HBS 4011
Spring 2008
Problem Set 2 Solutions
Optional MWG Problems: 8.D.4, 8.D.5, 8.F.2
8.F.2
First we show that none of D, L, or B1 is weakly dominated:
u1 (D, R, B2 ) > u1 (U , R, B2 ) D is not weakly dominated.
L and B1 are
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Review of Economic Studies, Ltd.
Strategic Pricing, Consumer Search and the Number of Firms
Author(s): Maarten C. W. Janssen and Jos Luis MoragaGonzlez
Source: The Review of Economic Studies, Vol. 71, No. 4 (Oct., 2004), pp. 10891118
Published by: Oxfor
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
10
10.1
Competitive Markets
Pareto Optimality & Competitive Equilibria
Denition (Economic Allocation): An economic allocation is a specication of a consumption
vector xi Xi for each consumer i = 1, ., I and a production vector yj Yj for each rm j = 1, .,
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Global Games and Equilibrium Selection
Author(s): Hans Carlsson and Eric van Damme
Source: Econometrica, Vol. 61, No. 5 (Sep., 1993), pp. 9891018
Published by: Econometric Society
Stable URL: http:/www.jstor.org/stable/2951491
Accessed: 03112015 01:53
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
12
12.1
Market Power
Monopoly Pricing
Demand: q = x(p) or p(q) = x1 (q), continuous & decreasing
Assumption: p < s.t. x(p) = 0 for p p.
Production cost: c(q)
Monopolists problem:
max px(p) c(x(p)
p
or equivalently,
max p(q)q c(q)
q0
Further assumptio
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Bargains and Ripoffs: A Model of
Monopolistically Competitive
Price Dispersion
STEVEN SALOP
Federal Reserve Board
and
JOSEPH STIGLITZ
Stanford University and Oxford University
INTRODUCTION
This paper analyses an economy in which agents differ in their abi
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Problem Set 5  Suggested Solution
Problem 1: MWG 8.D.2. We are asked to show that if a single outcome survives
the iterated elimination of strictly dominated strategies, then that outcome is a Nash
equilibrium.
We will prove this statement by contradicti
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Methods in Finance Theory  FNCE 928
John Y. Zhu
Course Description: This doctoral level course introduces students to
game theory and continuoustime methods. Both techniques represent fundamental approaches to organizing, modeling and understanding comp
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
EconS 503  Advanced Microeconomics II
Handout on Repeated Games
1. MWG 9.B.9
Consider the game in which the following simultaneousmove game as depicted in gure 1 is
played twice:
Player 1
a1
a2
a3
Player 2
b1
b2
b3
10; 10 2; 12 0; 13
12; 2 5; 5 0; 0
13;
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
r
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ud up e h h w g e
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The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Tacit Collusion
Yukfai Fong
Econ 5210 Microeconomic Theory I
HKUST
1
Introduction
Competitors mostly interact repeatedly in a dynamic setting
Incentive to avoid headtohead competition is obvious
We will introduce the basic model of tacit collusion.
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
American Economic Association
Oligopolistic Pricing with Sequential Consumer Search
Author(s): Dale O. Stahl II
Source: The American Economic Review, Vol. 79, No. 4 (Sep., 1989), pp. 700712
Published by: American Economic Association
Stable URL: http:/ww
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
ARE 202  notes
VillasBoas/Perloff 2nd half
Topics
1. Product Differentiation, Quality, Advertising, Asymmetric Information
Problem Set 1
2. Imperfect information and Search models
3. Repeated Games
Problem Set 2
4. Strategic Noncooperative Behavior
5.
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Search markets:
Introduction
Caltech
Ec106
(Caltech)
Search
Feb 2010
1 / 16
Why are prices for the same item so dierent across stores?
(see evidence)
A puzzle considering basic economic theory: review this.
Consider the benchmark of perfect competition
(C
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Experience Goods, Credence Goods and Experts
(Part I: Basic Results)
Yukfai Fong
Econ 5210 Microeconomic Theory I
HKUST
1
Experience Goods and Reputation
An experience good is a product or service where its quality is privately known to the
seller prior
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Measuring Risk:
First Order Stochastic Dominance
Let G() and F () on [0; 1] be two continuous distribution functions; such that F (0) = G(0) = 0
Denition: The distribution F rstorder stochastically dominates G i
F (x) G(x) for all x.
30
First Order Stoch
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Econ 5210: Ph.D. Microeconomic Theory I
Fall 2015 Syllabus (DRAFT)
Department of Economics
HKUST Business School
Class Schedule: August 31; September 7, 14, 17, 24; October 5, 8, 12, 15, 19, 22, 26;
November 2, 9, 23
Time:
1:304:50p.m.
Venue:
LSK Rm. 1027
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Problem Set I: Preferences, W.A.R.P., consumer choice
Paolo Crosetto
paolo.crosetto@unimi.it
Exercises solved in class on 18th January 2009
Recap:
,
,
Denition 1. The strict preference relation
is
y x
x
y but not y
x
Denition 2. The indifference relation
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Solutions: Problem Set 1
Econ 2020b/ API 112
February 2007
MWG 8.D.9
a)
This requires some mindreading on my part. If you think like me, youd choose M: you
get 0 no matter what, thus avoiding the possibility of major losses. If you chose something else,
The Hong Kong University of Science and Technology
Microeconomic theory I
ECON 5210

Fall 2015
Solutions: Problem Set 2
Econ 2020b/ API 112
February 2007
MWG 7.E.1
a)
A strategy specifies a players moves for all distinguishable contingencies in which he/she
is called on to move. This means a players strategy must include one move for each of his/he