CAND OECON.OE31 - Market Design: The Economist as Engineer* "NOT ESTABLISHED"

Faculty
Steffen Andersen

Course Coordinator
Steffen Andersen

Prerequisite/progression of the course

Students are expected to have taken basic price theory, some game theory as well as basic statistics and econometrics.

Course content, structure and teaching

The course has a duration of 15 weeks (ex. exam) and has one weekly lecture of 2 hours. Each lecture consists of blackboard lecturing on the underlying theory of market design, as well as discussion and presentations by students on the application of theory to different market settings

The course's development of personal competences

This course gives each student a deeper understanding on how to design and manipulate markets. The student will be able to identify the underlying structures and imperfections of different markets, and thus be able to come up with new and better market structures to better fit societal and market demands.

Learning Objectives

This course deals with the theory and practice of market design, with examples drawn from such areas as auctions, labor markets, marriage market, school choice, traffic congestion, Carbon Trading and Kidney exchange.
Economic institutions evolve, but they are also designed. Market makers and regulators, as well as entrepreneurs and managers, have always been involved to some extent in the design of economic institutions. Game theory is the part of economics concerned with the detailed rules and procedures of economic institutions. Thus in the course we seek to build the bridge between economic game theory and the practical design of markets.

At the end of the course, the student must be able to:

1. Describe, classify, structure, and combine the concepts, theories, methods, and models of the course.

2. Identify relevant problems within market design

3. Analyse and synthesise concrete problems within market design and apply the concepts, theories, methods, and models of the course.

4. Evaluate and disseminate solutions to problems within market designs at an independent and reflected academic level.

Type of examination, exam aids and assessment

The final exam will be a 10 page research paper. The objective of the final paper is to study an existing market or an environment with a potential role for a market, describe the relevant market design questions, and evaluate how the current market design works and/or propose improvements on the current design.

Recommended literature

The syllabus will be a compendium of recent research articles on applied market designs. These includes among others:

Roth, Alvin E., " The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics ," Fisher-Schultz Lecture, Econometrica, 70,4, July 2002, 1341-1378.
Roth, A.E., " The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory ," Journal of Political Economy, 92, 1984, 991-1016
McKinney, C. Nicholas, Niederle, Muriel and Alvin E. Roth, " The collapse of a medical labor clearinghouse (and why such failures are rare) ," American Economic Review, 95, 3, June, 2005, 878-889.
Abdulkadiroglu, Atila , Parag A. Pathak , and Alvin E. Roth, " Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match ,'' American Economic Review, 99, 5, Dec. 2009, pp1954-1978.
Roth, A.E. and X. Xing, " Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions ," American Economic Review, 84, September, 1994, 992-1044
Klemperer, Paul. 2002. "What Really Matters in Auction Design?" Journal of Economic Perspectives, 16(1), 169-189.
Cramton, Peter and Suzi Kerr. 2002. "Tradeable Carbon Permit Auctions: How and Why to Auction Not Grandfather." Energy Policy, 30, 333-345
Roth, Alvin E. " Repugnance as a Constraint on Markets ", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58.
Paul Milgrom “ Putting Auction Theory to Work ”
Coles, Peter and Muriel Niederle “ Signaling in Matching Markets ”
Edelman, Benjamin, Ostrovsky, Michael, and Schwartz, Michael, “ Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords ”, American Economic Review, forthcoming, March 2007.
Edelman, Benjamin (2008)," Running Out of Numbers: The Impending Scarcity of IP Addresses and What To Do About It ,"
Hatfield, John William and Milgrom, Paul R. (2005), " Matching with Contracts ," The American Economic Review, Volume 95, Number 4, September 2005, pp. 913-935(23)
Erdil, Aytek and Haluk Ergin, What's the Matter with Tie-breaking? Improving Efficiency in School Choice , American Economic Review , 98(3), June 2008, 669-689 .
Fisman, Raymond, Sheena Iyengar, Emir Kamenica, and Itamar Simonson. 2006. " Gender Differences in Mate Selection: Evidence from a Speed Dating Experiment ." Quarterly Journal of Economics, 121(2), 673-697.
“Combinatorial Auctions”, MIT Press , 2006, Peter Cramton, Yoav Shoham, and Richard Steinberg (editors)

Last updated by Electives Secretariat 22/06/2010

Course specifications

Offered by:
MSc in Advanced Economics and Finance (cand.oecon.) Elite Master

Department/center:
Department of Economics

Level:
Master

Main Category of the course:

Economics, macro economics and managerial economics etc.

Subcategories of the course:

Finance, Methodology

ECTS:
7.5

Language:
English

Max. number of students:
25

Schedule:

Tuesday 10:45-12:35 (weeks 35-49)

Exam type:

10 page research paper

Question directory

Course contact:
Steffen Andersen

Administrative contact
Rikke Glahn

Registration/deregistration:
valgfag.stu@cbs.dk

Course credit for CBS students:
Positive / negative list for CBS students

General questions
Student Guidance Service

Specific Information:

General Information for all:

CAND OECON.OE31 - Market Design: The Economist as Engineer* "NOT ESTABLISHED"

Course specifications

Question directory