Microeconomic Theory II

Module description

This is the second module in microeconomic theory. You will study rational strategic decision making, i.e. game theory in static and dynamic contexts, both with and without complete information. After developing the tools to theoretically analyse core games, you will study applications to bargaining, auctions, signaling games, strategic information transmission, repeated games, issues of reputation and market design. This will be complemented by understanding the actual behavior of decision makers in strategic settings, i.e. behavioural game theory.

Full module specification

Module title:Microeconomic Theory II
Module code:BEEM140
Module level:M
Academic year:2019/0
Module lecturers:
  • Dr Edwin Ip - Convenor
Module credit:15
ECTS value:






Duration of module: Duration (weeks) - term 2:


Module aims

The aim of the module is to develop formal reasoning abilities and apply tools of strategic thinking and strategic problem solving widely used by economists and other social scientists. After completing this course, you will be able to reason formally and model strategic decision makers in a variety of economic contexts.

ILO: Module-specific skills

  • 1. develop formal mathematical reasoning abilities.
  • 2. formally model strategic interactions.
  • 3. formally describe suitable equilibrium outcomes of the strategic interactions.
  • 4. analytically solve models of games.

ILO: Discipline-specific skills

  • 5. critically evaluate frontier research in game theory and its applications.
  • 6. develop formal modelling abilities of core economic phenomena.
  • 7. theoretically build and solve formal models of economic phenomena requiring strategic reasoning.

ILO: Personal and key skills

  • 8. develop formal reasoning abilities and engage in abstract thinking.
  • 9. recognise and model strategic interactions.

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning and Teaching22Lecturers (2 hours per week)
Scheduled Learning and Teaching10Tutorials (1 hour per week)
Independent Study118Independent study

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Problem sets (2 over the course of the term)10 questions per problem set1-9Oral, and written(ELE)

Summative assessment (% of credit)

CourseworkWritten examsPractical exams

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Midterm Exam251 hour1-9Oral and written feedback(ELE)
Problem Set2510 questions1-9Oral and written feedback(ELE)
Problem Set2510 questions1-9Oral and written feedback(ELE)
Examination251 hour1-9Written

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Mid TermExam (1 hour) 25%1-9Aug/Sep
Problem SetProblem set (10 questions) 25%1-9July
Problem SetProblem set (10 questions) 25%1-9July
ExaminationExamination (1 hour) 25%1-9Aug/Sep

Syllabus plan

• Static game theory with complete information: Nash Equilibrium:
• Static Game Theory with Incomplete Information: Bayesian Nash Equilibrium
• Dynamic Game Theory with complete information: Subgame Perfect Equilibrium
• Dynamic Game Thoery with incomplete information: Sequential Equilibrium
• Repeated Games
• Bargaining
• Auctions
• Signalling Games
• Strategic Information Transmission
• Reputation
• Behavioural Game Theory

Indicative learning resources - Basic reading

Microeconomic Theory, Mas-Colell, A , Whinston, M.D and Green, OUP USA, 1995.
Game Theory, Fudenberg and Tirole, ANE Books, 2009.
Game Theory, Maschler, Solan and Zamir, Cambridge University Press, 2013.
Economics and the Theory of Games, Fernando Vega-Redondo, Cambridge University Press, 2010.
Theory of Learning in Games, Fudenberg and Levine, MIT Press, 1998.

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