Auctions are a central instrument of the digital economy—sometimes visible, as on eBay, but also operating behind the scenes, for example automatically in the background of every Google search or in the price formation of electricity markets. But which strategic incentives shape the behavior of bidders? And how can auction mechanisms be designed to maximize efficiency or revenue?

This course conveys the theoretical foundations and methodological tools for analyzing and designing auctions and mechanisms. Students will learn equilibrium concepts of strategic interaction in auction markets, compare auction formats in terms of efficiency and revenue, and become familiar with the principles of (Bayesian) mechanism design. Mechanism design can be understood as the deliberate design of games to achieve specific economic objectives. The concepts and methods taught in this course are also applicable in many other economic contexts.

The course is aimed at students interested in the game-theoretic modeling of markets as well as in the design of economic incentive mechanisms and strategic games. The necessary game-theoretic foundations will be introduced in the course.