Bachelor
2020/2021
Recent Advances in Auction Theory
Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'
Category 'Best Course for New Knowledge and Skills'
Type:
Elective course (Economics)
Area of studies:
Economics
Delivered by:
Department of Theoretical Economics
Where:
Faculty of Economic Sciences
When:
4 year, 3 module
Mode of studies:
offline
Instructors:
Anastasia Antsygina
Language:
English
ECTS credits:
3
Contact hours:
36
Course Syllabus
Abstract
This course overviews the standard models of an auction. First, we will get familiar with the existing auction formats and learn when each of them is preferable. Second, we will study a classical auction for a single, indivisible object in detail, and establish the main results in mechanism design, such as the revelation principle, revenue equivalence, and the seller-optimal auction. Third, we will make the model more realistic and complement it with endogenous entry, information acquisition, and multiple objects to sell. Fourth, we will discuss the theory behind several empirical approaches used in auction studies. Finally, we will examine other auction-like mechanisms that characterize a wide range of real life interactions: contests, or all-pay auctions, where players compete for prizes by exerting effort, and a simple model of internet ad auctions. The course targets 3rd and 4th year BA students who already know the key principles of economic thinking, are familiar with the core disciplines, such as Microeconomics and Game Theory, and have the skills to solve theoretical models. The class consists of lectures (30 academic hours in total) and seminars (6 academic hours in total). The main activities include (1) lectures, (2) students’ presentations, (3) written home assignments, and (4) a final test. The discipline is instructed in English.
Learning Objectives
- Learn how to formulate and solve simple auction models
- Understand how simple auction models can be estimated
- Apply the key principles of mechanism design in own theoretical research
Expected Learning Outcomes
- Read, understand, and critically assess research and policy papers on auctions and mechanism design
- Model a strategic interaction in a competitive environment and use the tools of mechanism design to solve the problem of interest
- Construct a mapping between theoretical auction models and data
- Develop own research ideas related to auctions and mechanisms
Course Contents
- Introduction: Auction FormatsIntroduction: Auction Formats
- Introduction: Game of Complete and Incomplete InformationA Simple Auction Model in These Two Information Environments
- Solving a Simple Auction Model: First Price vs Second Price AuctionsSolving a Simple Auction Model: First Price vs Second Price Auctions
- Introduction to Mechanism DesignThe Revelation Principle, Dominant Strategy vs Bayesian Implementation, Application to Auctions
- Extending the Basic Auction ModelCorrelated Types, Common Values, Entry Decisions, and Multiple Units to Sell
- Bringing Auction Theory to DataSome Basic Identification Results
- All-Pay AuctionsNoisy Output vs Unobservable Effort and Tullock-Type Contests, Equilibria in All-Pay Auctions under Complete and Incomplete Information,Design Issues in All-Pay Auctions (The Optimal Prize Allocation, Information Disclosure etc.)
- Some Applications of Auction TheoryInternet Ad Auctions and Spectrum Auctions
- Presenting a Pre-Selected Paper and Preparing a Referee Report on It
Assessment Elements
- Home Assignment 1
- Home Assignment 2
- Presenting a Pre-Selected Paper
- Writing a Referee Report on a Pre-Selected Paper
- Final test
