The course starts with the basic theory of equilibrium behavior and revenue management in one object standard auctions. The revenue equivalence theorem for standard auctions is introduced. Thereafter, the course focuses on mechanism design and its applications to one 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 lecture will be held in English.

The assessment consists of a written exam (60 minutes) (following §4(2), 1 of the examination regulation).
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.

Krishna, V.: Auction Theory, Academic Press, 2009.

Milgrom, P.: Putting Auction Theory to Work, Cambridge University Press, 2010.

Mathews, S.: A Technical Primer on Auction Theory I: Independent Private Values No. 1096. Northwestern University, Center for Mathematical Studies in Economics and Management Science, 1995.