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Economics & Financial SystemsResource

Micro-Economics Models of Imperfect and Incomplete Information

Outline:

Outline:

1. Monopoly

Review

Price Discrimination: Third-degree discrimination, Schmalensee Model, First-degree discrimination, Second-degree discrimination

Other ways: Bundling or quantity discounts, Intertemporal - Lazear fashion goods model

2. Oligopoly Theory

Static Oligopoly: Cournot, Bertrand, Product Differentiation, Advertising and pricing, Buying drilling rights

Multi-stage games: Stackelberg, War of attrition

Repeated games with a history: Bertrand pricing game, Folk theorems, Sequential bargaining

3. Search and Adverse Selection: Fixed search, Sequential search, Diamonds model, Lemons problem

4. Games with Incomplete Information and Auctions

Bayesian Nash equilibrium

Public goods provision

Auctions

Vickrey auction, First price sealed bid auction, Empirics of auctions, Market design, Winner's curse, Double auction

5. Signalling, Moral Hazard and Insurance markets Click here to access notes

The notes are based on Lectures by Dr. Martin Pesendorfer, LSE

Some other sources to understand concepts: For SPNE, Single deviation principle, Bargaining: Click here