Recent Advances in Auction Theory

2023/2024

Academic Year

ENG

Instruction in English

3

ECTS credits

Delivered at:

Department of Theoretical Economics

Course type:

Elective course

When:

4 year, 3 module

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

• construct a mapping between theoretical auction models and data
• develop own research ideas related to auctions and mechanisms
• model a strategic interaction in a competitive environment and use the tools of mechanism design to solve the problem of interest
• read, understand, and critically assess research and policy papers on auctions and mechanism design

Course Contents

• Introduction: Auction Formats
• Introduction: Game of Complete and Incomplete Information
• Solving a Simple Auction Model: First Price vs Second Price Auctions
• Introduction to Mechanism Design
• Extending the Basic Auction Model
• Bringing Auction Theory to Data
• All-Pay Auctions
• Some Applications of Auction Theory
• 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

Interim Assessment

• 2023/2024 3rd module
  0.4 * Final Test + 0.15 * Home Assignment 1 + 0.15 * Home Assignment 2 + 0.15 * Presenting a Pre-Selected paper + 0.15 * Writing a Referee Report on a Pre-Selected Paper

Bibliography

Recommended Core Bibliography

• Auction theory, Krishna, V., 2010
• Intermediate microeconomics : a modern approach, Varian, H. R., 2014

Recommended Additional Bibliography

• An introduction to auction theory, Menezes, F. M., 2008

Authors

• ANTSYGINA ANASTASIYA LEONIDOVNA