Econ 3010: Intermediate Price Theory (Microeconomics) Professor Dickinson Appalachian State University Lecture Notes Outline— Section 3

Game Theory Simultaneous Move Games Dominant Strategies Nash Equilibrium Mixed Strategies Sequential Move Games

Uncertainty Expected Utility Risk preferences Risk aversion, risk neutrality, risk-loving Example: Demand for Insurance Example: wage negotiations

Exchange and Efficiency The Edgeworth Box Market Trade First and Second Welfare Theorems of Economics

Production and General Equilibrium The Robinson Crusoe Economy Production and consumption What if more goods exist? Production and Edgeworth Exchange

Public Goods Simple externalities and Coase Theorem Provision of Public goods of various sizes or quality Free-riding Voting and the Paradox of voting

Asymmetric Information A lemons market Adverse Selection and Moral Hazard Signaling as a solution Education Example