Event

Many businesses in the digital economy monetize through auctions. For example, every time you use Google, an auction is held in the background. This course develops the basic theory of auctions and mechanism design that is necessary for gaining a deeper understanding of many markets in the digital economy.

The course starts with the basic theory of equilibrium behavior and revenue management in single-object standard auctions. The revenue equivalence theorem for standard auctions is introduced. Thereafter, the course focuses on mechanism design and its applications to single-object auctions and bilateral trade.

The students

• learn to analyze strategic behavior in auctions;
• learn to compare auction formats with regard to efficiency and revenue;
• are familiarized with the basic theory of (Bayesian) mechanism design;
• learn to master the revenue equivalence theorem for standard auctions;
• learn to apply mechanism design to one object auctions and bilateral trade.

The assessment consists of a written exam (60 minutes).

The exam takes place in every semester. Re-examinations are offered at every ordinary examination date.

Through successful participation in the Exercise, students can earn a bonus. If the grade on the written exam is between 4,0 and 1,3 the bonus improves the grade by one step (0,3 or 0,4). Details will be announced during the lecture.

The total workload for this course is approximately 135.0 hours. For further information see German version.

Recommendations:

Basic knowledge of microeconomics and statistics are recommended. A background in game theory is helpful, but not absolutely necessary.