Update (December 2020)

I am trying to solve a two-body problem in the American West. Here's my CV. Also check out:

### economics notes

4 March 2011

I've been TAing a few quarters now, and the more classes I TA the more section notes I type up; by no means am I a rockstar at explaining economics, but I'd like to think they've helped my students. Having searched the Internet and been generally frustrated with the available references to economic concepts and examples, I'll be posting everything here in hopes that it might do some good.

Most of these are in at least pseudo-draft form. If you catch any errors or want any further exposition, drop me a line in the comments or dig up my contact info on the about page (I'm more likely to respond to the latter). These will be maintained as works-in-progress.

### Introduction to microeconomic theory (UCLA ECON11)

• Why microeconomics? — why do we care about microeconomics? The (classical) notion of choice and preferences; the existence of utility and why numbers don't matter. Indifference and common utility functions.
• The consumer's problem — choice constrained by a budget; the structure of constrained optimization and some solution methods; issues of corner solutions and a high-level perspective of the Inada conditions.
• Expected utility — the definition of expected utility for simple lotteries; actuarially-fair pricing and its implications, with an application to the optimal selection of building material for a pig facing a wolf; demand functions, defined.
• Welfare effects — the expenditure-minimization problem, applied to computing change in consumption due to wealth (income) and substitution (price) effects; a pretty decent graphical depiction.
• Corner solutions — a recapitulation of why marginal utility per unit price matters; where corner solutions come from with to surplus (not surfeit) demand; good practice right- and left-floating graphs.
• The production possibility frontier — lecture notes on efficient production across firms, the marginal rate of technical substitution, and a simple linear example with burgers and fries; apologies to France.
• Edgeworth boxes — general equilibrium in two-agent economies; solution algorithms for the same; Pareto optimality; solution algorithms for the same; proof that I can draw things by hand; how to construct an Edgeworth box if you have a piece of paper that rotates.
• Decreasing returns to scale — a series of pictures illustrating a situation in which decreasing returns to scale may not be the worst assumption.

### Statistics (UCLA ECON41)

• Conditional probabilities and Bayes' rule — optimizing cereal selection; whether or not Bigfoot exists.
• Bayes' rule — a version of the standard “medical test” example to illustrate the application of Bayes' rule and marginal probabilities.
• PMFs (solutions) — the martingale betting strategy; investments; multiple-choice quiz layout.
• Convergence and PDFs (solutions) — convergence of the sample mean to the true mean; maximizing likelihood; where PDFs come from.
• Conditional distributions (solutions) — law of iterated expectation; aptitude versus performance; a taste of identification; can Burger King make you healthy?
• Confidence intervals — should a TA move office hours, given an email survey of his students? Are bike lockers at UCLA well-maintained? Confidence intervals are found both constructively and via formulae.
• Hypothesis testing — a wordy description of hypothesis testing as an interpretation of confidence intervals, with an application to which bus I should take to get home in the evening.
• Review questions — questions which variously hit every topic covered in introductory statistics (including combinatorics, counting, and basic probability) through a single example of student final exam scores.

### Microeconomics/equilibrium (UCLA ECON101)

• Nitty gritty introduction to game theory — dominance, Nash equilibrium, sequential games, and mixed strategies with an application to where Shab and I should go to dinner.
• Extensive-form games — an extensive-form game with a light take on knowledge; should I grade problem sets or just give everyone a C?
• Centipede games — centipede games as an introduction to game theory (this quarter we started with SPNE); an illustration of a situation in which backward induction is irrelevant and how it breaks.
• Mixed-strategy Nash equilibrium — why mixed-strategy Nash equilibrium is a necessary concept; how to find mixed-strategy equilibria; the relationship between mixed- and pure-strategy Nash equilibria in terms of the total number of equilibria.
• Hotelling's game[s] — an apology for a botched attempt to discuss Hotelling's pricing game (which has no apparent Nash equilibrium, as Hotelling's original paper discovered), followed by a simple coverage of Hotelling's location game.
• Discounting and repetition — a brief discussion of the counterintuitive implications of the standard cops-and-robbers formulation; wherefore, future discounting; repeating the ultimatum game with alternating offers and passage of time; a simple recursive approach to Rubinstein bargaining.
• Cournot and Stackelberg competition — examples of Cournot and Stackelberg competition models, with an extensive discussion of when the first mover wants to use its power to keep the second mover out of the market.
• Price discrimination and price competition — price discrimination, club cards, and a nonstandard price competition setup to illustrate how competitive equilibrium has explicit strategic implications.
• General equilibrium — the production possibility frontier, an exchange economy, and a general equilibrium problem with a corner-case production function which is linear in both capital and labor.

### Market design (UCLA ECON106D)

• Uses of revenue equivalence — solving an all-pay auction without the revelation principle, using revenue equivalence to compute strategies, order statistics and their applications.

### Theory of the producer and consumer (UCLA ECON201A)

I had a concussion during this quarter and most of my notes are not very good. What follows is the one set that is worth anything, and it only on a practice-problem basis.

• Production, assets, and insurance — a definitional approach to production; “baby asset-pricing”; a handful of very simple forms of insurance and what they imply about insurer profits.

### Microeconomics/auctions and marginal products (UCLA ECON201C)

Many of these notes refer to Essential Microeconomics, John Riley's textbook-in-progress. It's a good reference with a nice view towards applying questions to real-ish problems; this is of course opposed to MWG's proof-heavy book which, while mathematically powerful, is often devoid of any intuitive appeal.

• Auctions (with BNE) — auctions with finite types, as well as all-pay auctions with continuous types. A brief example of Bayesian Nash equilibrium taken from Essential Microeconomics; Batman.
• Single crossing and PBE — perfect Bayesian equilibrium and single crossing; numerous worked examples of old comp questions with perfect Bayesian equilibrium (and related concepts) and some quick incentive compatibility.
• Incentive compatibility — incentive compatibility, with ties to the intuitive criterion. Optimal package pricing. Many questions from Essential Microeconomics.
• Auctions and ironing — optimal auctions, ironing, the meaning of ex ante, interim, and ex post. Worked exercises regarding the construction of optimal auctions.
• Mechanisms and VCG — optimal auctions, designer-optimal mechansisms, Vickrey-Clarke-Groves. Mostly a potpourri of questions, with a couple throwbacks; basic common-value auctions sprinkled in.
• The appropriation principle — the alignment of social benefit with individual incentives to simultaneously achieve efficiency and incentive compatibility; implications for monetary transfers and the designer.

### CIBER Global Green Business Week

• Introduction to Game Theory — a ground-up introduction to game theory and related topics, assuming no knowledge of anything (other than how to find the extremum of a quadratic equation). Fairly well put-together, if I do say so, but the last bit on sustainability could use some work.

Graphics in these handouts are largely generated using R, a most-excellent math-friendly programming and scripting language with incredible graphical facilities. Code will be made available if you ask nicely (because why clutter up the lists above?).

Included $$\LaTeX$$ graphics are generated at LaTeX to png or by .