23940 Research in Market Design
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Credit points: 6 cp
Subject level:
Postgraduate
Result type: Grade and marksThere are course requisites for this subject. See access conditions.
Description
This subject is an introduction to market design. It covers the main contemporary applications of market design. It surveys the results for standard auctions and more specialised auctions such as combinatorial and sponsored search (i.e. keyword) auctions. It also surveys the results for matching markets (e.g. kidney exchange, school choice, dating).
Subject learning objectives (SLOs)
| 1. | Understand advanced theoretical models of auctions and matching markets |
|---|---|
| 2. | Modify existing (or develop new) models of trading mechanisms, and apply theory to determine their theoretical performance |
| 3. | Use the technical skills developed throughout the course to knowledgeably read contemporary research on market design |
Contribution to the development of graduate attributes
This subject is an introduction to market design. It surveys the central applications of market design.
Teaching and learning strategies
The subject will be taught using a combination of lectures and tutorials. There is no course textbook.
Content (topics)
- Standard Auctions
- More auctions: Combinatorial, sponsored search, troubled asset, etc.
- Matching Theory
- Kidney Exchange
- School Choice
- Dating markets/College early admissions
Assessment
Assessment task 1: Assigned homework and in-class quizzes (Individual)*
| Objective(s): | This addresses subject learning objective(s): 1 and 2 |
|---|---|
| Weight: | 25% |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 2: Presentations*
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 35% |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 3: Research Proposal
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 40% |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
No required text.
Recommended texts
Krishna's "Auction Theory" and Roth and Market Design by Guillaume Haeringer
Other resources
1. Introduction to Auction Theory, Revenue Equivalence Principle,Mechanism Design
Vickrey, William, "Counterspeculation, Auctions and Competitive Sealed Tenders," Journal of Finance, 1961.
Myerson, Roger, "Optimal Auction Design," Mathematics of Operations Research, 1981.
Maskin, Eric and John Riley, "Asymmetric Auctions," Review of Economic Studies, 2000.
Bulow, Jeremy and Paul Klemperer, "Auctions versus Negotiations," American Economic Review, 1995.
Bulow, Jeremy and John Roberts, "The Simple Economics of Optimal Auctions," Journal of Political Economy, 1989.
2. Auctions with interdependent valuations, Linkage Principle, Multiple Item Auctions
Milgrom, Paul and RobertWeber, "A Theory of Auctions and Competitive Bidding," Econometrica, 1982.
Ausubel, Lawrence, "An E¢ cient Ascending Bid Auction for Multiple Objects," American Economic Review, 2004.
Demange, Gabrielle, David Gale and Marilda Sotomayor, "Multi-Item Auctions," Journal of Political Economy, 1986.
Wilson, Robert, "Auctions of Shares," Quarterly Journal of Economics, 1979.
Ausubel, Lawrence and Peter Cramton, "Demand Reduction and Inefficiency in Multi-unit Auctions," Working paper, 2002.
3. Empirical Auctions
Guerre, Emmanuel, Isabelle Perrigne, and Quang Vuong. "Nonparametric identification of risk aversion in first?price auctions under exclusion restrictions." Econometrica 77.4 (2009): 1193-1227.
Guerre, Emmanuel, Isabelle Perrigne, and Quang Vuong. "Optimal nonparametric estimation of first?price auctions." Econometrica 68.3 (2000): 525-574.
Tong Li, Jun Zhang, and Bean Zhao. "Nonparametric Identification and Estimation of Bayesian Games"
4. Topics in Auction Theory
Edelman, Ben, Michael Ostrovsky and Michael Schwarz, "Internet Advertising and the Generalized Second Price Auction," American Economic Review, 2007.
Varian, Hal, "Position Auctions," International Journal of Industrial Organization, 2007.
Athey, Susan and Glenn Ellison, "Position Auctions with Consumer Search," Working paper, June 2008.
Day, Robert and Paul Milgrom, "Core-Selecting Package Auctions," International Journal of Game Theory, 2008.
Milgrom, Paul, "Package Auctions and Exchanges," Econometrica, 2007.
Goeree, Jacob and Yuanchuan Lien, "On the impossibility of core-selecting auctions," Working paper, January 2011
Ausubel, Lawrence, and Oleg Baranov, "Core-Selecting Auctions with Incomplete Information," Working paper, August 2010
5. Introduction to Matching Theory
Gale, David and Lloyd Shapley, "College Admissions and the Stability of Marriage," American Mathematical Monthly, 1962.
Lloyd Shapley and Herbert Scarf, "On cores and indivisibility," Journal of Mathematical Economics, 1974
Roth, Alvin, "The Economist as Engineer: Game Theory, Experimental Economics and Computation as Tools of Design Economics," Econometrica, 2002
Sonmez, Tayfun and Utku Unver, "Matching, Allocation and Exchange of Discrete Resources," Handbook of Social Economics, 2011
6. House Allocation, Kidney Exchange, School Choice
Abdulkadiro.glu, Atila, and Tayfun Sönmez, "House allocation with existing tenants," Journal of Economic Theory, 1999
Roth, Alvin E., Tayfun Sonmez, and M. Utku Unver, "Kidney Exchange," Quarterly Journal of Economics, 2004.
Abdulkadiro.glu, Atila, and Tayfun Sönmez, "School Choice: A Mechanism Design Approach," American Economic Review, 2003
7. Topics in Matching Theory
Bogomolnaia, Anna, and Herve Moulin, "A New Solution to the Random Assignment Problem," Journal of Economic Theory, 2001
Kojima, Fuhito and Mihai Manea, .Incentives in the Probabilistic Serial Mechanism,.Journal of Economic Theory, 2010
Erdil, Aytek, and Haluk Ergin, "What.s the Matter with Tie-Breaking? Improving Efficiency in School Choice," American Economic Review, 2008.
Ergin, Haluk and Tayfun Sönmez, "Games of School Choice Under the Boston Mechanism," Journal of Public Economics, 2008
Abdulkadiroglu, Atila and Tayfun Sonmez, "Random Serial Dictatorship and the Core from Random Endowments in House Allocation Problems,"
Econometrica, 1998
Kelso, Alexander and Vincent Crawford, "Job Matching, Coalition Formation, and Gross Substitutes", Econometrica, 1982
Hatfeld, William and Paul Milgrom, "Matching with Contracts," American Economic Review, 2005
Bulow, Jeremy and Jonathan Levin, "Matching and Price Competition, American Economic Review, 2006
Ostrovsky, Michael, "Stability in Supply Chain Networks," American Economic Review, 2008
8 . Bayesian Persuasion and Information Design
Kamenica, Emir, and Matthew Gentzkow. "Bayesian persuasion." American Economic Review 101.6 (2011): 2590-2615.
Zhang, Jun, and Junjie Zhou. "Information disclosure in contests: A Bayesian persuasion approach." The Economic Journal 126.597 (2016): 2197-2217.
Chen, Yanlin, and Jun Zhang. Signaling by Bayesian Persuasion and Pricing Strategy. Short title: Disclosure and Price Signaling. No. 2019/14. 2019.