University of Technology Sydney

23793 Mechanism Design

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2024 is available in the Archives.

UTS: Business: Economics
Credit points: 3 cp

Subject level:

Postgraduate

Result type: Grade and marks

Requisite(s): 23715 Game Theory and Strategic Decision Making
There are course requisites for this subject. See access conditions.

Description

Traditionally, economics focuses on the study of existing markets but recently, economists have been involved in the design of markets for new products and the redesign of existing markets that are performing poorly. The subject focuses on strategic decision-making and the theory and practice of mechanism design. Applications are drawn from online auction markets, government auctions of natural resources, matching markets (students to classes or schools, medical residents to hospitals, kidneys to recipients), health care markets, and electricity markets.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. demonstrate an in-depth understanding of the field of mechanism design, its applications and the associated engineering concerns
2. develop and appraise reasonable solutions to real work mechanism design problems and evaluate their theoretical performance
3. use economic theory, experiments and empirical analysis to assess market rules and institutions

Contribution to the development of graduate attributes

The field of market design studies how to design rules for the allocation of resources. This course is an introduction to mechanism design. It will survey the central applications of mechanism design. Its focus will be to give students the tools to think critically about institutions and market rules and identify why some fail and some succeed. Students will learn to recognize mechanism design problems in the real world and suggest reasonable solutions.

This subject contributes to the development of the following graduate attributes:

  • Intellectual rigour and innovative problem solving
  • Professional and technical competence

Teaching and learning strategies

This subject will articulate theoretical discussions with examples of application in a wide range of domains including eBay auctions, Keyword auction, Spectrum auctions, Marriage Matching. Subject content will be presented to students in a variety of formats – including pre-recorded videos, lecture slides, notes, and articles – delivered both online and in-class. Students are expected to review materials on the learning management system and complete tasks on their own before attending two review sessions with the lecturer. Materials will be provided to students on the learning management system but students are also expected to seek other information independently. Seminars will offer face to face (or via zoom) interaction to review the material and facilitate/encourage student engagement. Seminars are highly interactive where students will learn about mechanism design concepts and methods and apply these to solve problems and case studies, either individually or in small groups. Students will receive individual feedback from the lecturer.

Content (topics)

  • Standard auctions
  • More auctions: eBay, Keyword Auctions, Spectrum Auctions
  • Matching markets

Assessment

Assessment task 1: Weekly Mini Quizzes (Individual)*

Objective(s):

This addresses subject learning objective(s):

1

Weight: 40%
Criteria:
  • Depth of knowledge
  • Insights into economic problems based on the economic models discussed in class

*Note: Late submission of the assessment task will not be marked and awarded a mark of zero.

Assessment task 2: Case Study (Individual)

Objective(s):

This addresses subject learning objective(s):

1, 2 and 3

Weight: 60%
Criteria:
  • Information is communicated effectively for specific audience
  • Demonstrate critical and creative thinking in solution development
  • Develop realistic and achievable strategies and course of action

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

Haeringer, Guillaume. Market design: auctions and matching. MIT Press, 2018

References

Krishna, Vijay. Auction theory. Academic press, 2009