Dr Andrew Ellis 32L 3.15

Dr Christopher Sandmann 32L.4.24

This course is available on the BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Mathematics and Economics, BSc in Mathematics with Economics, BSc in Mathematics, Statistics and Business and BSc in Philosophy and Economics. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.

Students must have completed Microeconomic Principles I (EC201) or Microeconomic Principles II (EC202) or Microeconomics II (EC2A1) or Microeconomics II (EC2A3), or equivalent.  Fluency in calculus is essential, and some knowledge of analysis, probability theory, linear algebra and set theory is advantageous.

This course reviews fundamental concepts in economic theory and presents some of its most successful applications. The first part of the course consists of an introduction to auction theory. Auctions have been widely used to allocate spectrum licenses, drilling rights or central bank lending against collateral; their design is therefore of immediate practical concern. The theory, drawing on mechanism design, allows us to analyse what makes auctions desirable, how different formats compare, and tackle issues such as strategic entry, collusive behaviour, or allocative externalities. Our treatment will be strictly theoretical and cover fundamental issues, most importantly the revenue equivalence theorem. From here we will embark on an eclectic tour, covering issues relating to competition policy and auction design, and exploring connections with competitive markets and nonlinear pricing. The second part of the course will survey concepts in non-cooperative game theory and will introduce students to game theoretic modeling in economics. After setting up the primitives of the game theory framework, different solution concepts will be analysed with an emphasis on economic applications including bargaining, voting, communication, and matching.

15 hours of lectures and 10 hours of classes in the MT. 15 hours of lectures and 9 hours of classes in the LT. 1 hour of classes in the ST.

There will be a reading week in Week 6 of LT (no lectures or classes that week)..

This course is delivered through a combination of classes and lectures totalling a minimum of 50 hours across Michaelmas Term and Lent Term.  

Solutions to the assigned problem sets are to be prepared before and will be discussed during classes. In addition, students are encouraged to submit up to four of the designated hand-in problem sets, two for each part, to receive feedback from class teachers.

P. Klemperer, Why Every Economist Should Learn Some Auction Theory, Cambridge 2003. (available on the author’s website http://www.nuff.ox.ac.uk/users/klemperer/WhyEveryEconomist.pdf)

V. Krishna, Auction Theory, Academic Press, 2009.

M. Osborne, An Introduction to Game Theory, Oxford University Press, 2003.

 

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the summer exam period.