Axiomatic Mechanism Design

2024/2025

Academic Year

ENG

Instruction in English

6

ECTS credits

Delivered at:

Department of Mathematics

Course type:

Elective course

When:

2 year, 1, 2 module

Instructor

Dogan, Emre

Course Syllabus

Abstract

Collective decision making is a challenging process for a society. Oftentimes it is delegated to carefully crafted rules or mechanisms which becomes well working institutions in the long run if they meet certain axioms testing the desirability of outcomes. The goal of the course is to give the students a broader sense of understanding of at times seemingly not very related branches of literatures within theoretical microeconomics from the unifying perspective of axiomatic mechanism design. We start with an introduction to social choice theory, mechanism design, and implementation of social choice functions. Then, we move on to discussing the well-known solutions in the literature for all the following problems and their axiomatic analysis on the basis of various versions of fairness, efficiency, consistency and incentive compatibility criteria: Assignment, random assignment, congested assignment, matching, school choice problems, fair allocation of goods and objects with and without transfers, cooperative game theory, and cost sharing problems.

Learning Objectives

• Be able read the modeling section of academic papers in the topics discussed in the lecture, understand the axioms, their nature, relevance and their logical conclusions. Moreover, given the results mechanism and the papers discussed in the lectures, students should be able to understand the relevance and the contribution of an academic paper to the literature when they read it.

Expected Learning Outcomes

• Students should easily read and understand basics of the modeling part in the academic papers.
• Students should easily read and understand basics of the modeling part in the academic papers. They should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design.
• Students should easily read and understand basics of the modeling part in the academic papers. They should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design
• Students should easily read and understand basics of the modeling part in the academic papers, they should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design.
• Students should easily read and understand basics of the modeling part in the academic papers, they should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design
• Students should easily read and understand basics of the modeling part in the academic papers. Students should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design
• Students should easily read and understand basics of the modeling part in the academic papers. Students should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. They should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design.
• Students should easily read and understand basics of the modeling part in the academic papers. Students should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. Students should be able to understand formal statements and prove formal statements. Then should understand strategic issues associated with the rule/mechanism design.
• Students should easily read and understand basics of the modeling part in the academic papers. Students should know the axioms and their implications in various models including choice, social choice, assignment, matching, school choice, cooperative games, and fair allocation. Students should be able to understand formal statements and prove formal statements. Students should understand strategic issues associated with the rule/mechanism design.

Course Contents

• Preference, utility and choice
• Social Choice Theory
• Strategy-proofness and an introduction to mechanism design
• Modeling and axioms
• Assignment (deterministic)
• Random assignment and congested assignments
• Two-sided matching
• School Choice
• Cooperative games and fair division/allocation

Assessment Elements

• Midterm
• Homework
• Presentation
• Attendance

Interim Assessment

• 2024/2025 2nd module
  0.1 * Attendance + 0.3 * Homework + 0.3 * Midterm + 0.3 * Presentation

Bibliography

Recommended Core Bibliography

• Aleskerov F., Bouyssou D., Monjardet B. ‘Utility Maximization, Choice and Preference’, Springer Verlag, Berlin, 2007
• Fuad Aleskerov, Denis Bouyssou, & Bernard Monjardet. (2007). Utility Maximization, Choice and Preference. Post-Print. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.hal.journl.halshs.00197186
• 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
• Market design : auctions and matching, Haeringer, G., 2017

Recommended Additional Bibliography

• Axioms of cooperative decision making, 332 p., Moulin, H., 1991
• Cooperative microeconomics: a game-theoretic introduction, Moulin, H., 2016
• Handbook of social choice and welfare. Vol.1: ., , 2002
• Handbook of social choice and welfare. Vol.2: ., , 2011
• Microeconomic theory, Mas-Collel, A., 1995
• Two-sided matching: a study in game-theoretic modeling and analysis, Roth, A.E., 1992
• Utility maximization, choice and preference : with 49 figures and 28 tables, Aleskerov, F., 2007
• Utility maximization, choice and preference, Aleskerov, F., 2002

Authors

• DOGAN EMRE