Mechanism Design

2024/2025

Academic Year

ENG

Instruction in English

4

ECTS credits

Delivered at:

Department of Economics

Course type:

Compulsory course

When:

4 year, 1 module

Instructor

Kondratev, Aleksei

Course Syllabus

Abstract

Mechanism design is a science of how to construct economic mechanisms (rules, environments, institutions) with desirable properties. While the usual microeconomic approach aims at understanding how agents behave in certain environments given certain rules, Mechanism design aims at finding "good" rules that lead to desirable outcomes. At the same time the rules themselves have to be simple and non-manipulable, i.e. provide incentives to participate sincerely. Mechanism design uses game theory tools and can be considered as its most applied part. The range of applications is very broad: from auctions and internet marketplaces to admission of young students to colleges, voting mechanisms, online dating services, and many others.

Learning Objectives

• overview of general methods used to design mechanisms in different areas of life
• provide an overview of general methods used to design mechanisms in different areas of life
• rovide an overview of general methods used to design mechanisms in different areas of life

Expected Learning Outcomes

• Able to identify deficiencies in real-life markets
• Know Revenue Equivalence Theorem, its assumptions and applications
• Know standard auction forms and able to find optimal bidding functions
• Know types of games and solution concepts
• Understand the main concepts and properties of mechanism design
• Able to define and apply fair division, assignment, matching and voting mechanisms; know properties of these mechanisms

Course Contents

• 1. Example of market design problem.
• 2. Revenue equivalence.
• 3. Matching.
• 4. Assignment.
• 5. Voting and ranking.
• 6. Positional voting rules, iterative scoring rules and their properties.
• 7. Strategic voting.

Assessment Elements

• Test
• Exam

Interim Assessment

• 2024/2025 1st module
  0.6 * Exam + 0.4 * Test

Bibliography

Recommended Core Bibliography

• Haeringer, G. (2018). Market Design: Auctions and Matching. The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.mtp.titles.0262037548
• Handbook of Computational Social Choice. (2016). Cambridge University Press. https://doi.org/10.1017/cbo9781107446984

Recommended Additional Bibliography

• Paul Klemperer. (2004). Auctions: Theory and Practice. SUNY-Oswego, Department of Economics. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.oet.tbooks.auction1

Authors

• BRODSKAYA NATALYA NIKOLAEVNA
• KONDRATEV ALEKSEY YUREVICH