Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?

Structure Definition Consumption externality Production externality The tragedy of commons

Contents The Edgeworth (艾奇沃斯) Box Pareto improving trade Pareto Efficient Allocation The Core (核心) Trade in a competitive market Walras’ Law of general equilibrium (一般均衡)

Structure Non-collusive moves – Simultaneous moves Quantity competition –Cournot model Price competition – Bertrand model – Sequential moves Quantity leadership – Stakelberg model Price leadership Collusion

Structure Market environments Market demand for a competitive firm Short-run supply decision Upward sloping MC curve Shut-down condition Long-run supply decision Comparing long-run and short-rundecisions. Producer’s surplus and profits

OTHER GOOD Rebating a Consumption tax based on inder RTP initial consumption RTP budget constraint Baseline

北京大学：《中级微观经济学》课程教学资源（PPT课件讲稿，英文版）Indifference curves（主讲：赵耀辉）

Content The“core Uniqueness of equilibrium Stability of equilibrium · Welfare

Equilibrium price. Equilibrium allocation: x=xi(p,p·w2), Note: A p* for any >0 is also an equilibrium price. Offer curve: (p)(p, p. w;). The equilibrium is the intersection point of the offer curves. Excess demand function:

(1)i(p, u) is zero homogeneous in p (2) substitution matrix: Dpi(p, u)<0 (3)symmetric cross-price effects: 23i(p 2=2z(p, u) (4) decreasing:=n≤0