Students learn to analyze strategic behavior in auctions and to compare auction formats with regard to efficiency and revenue. In addition, students learn the basic theory of (Bayesian) mechanism design. 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.

Literature:

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

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

Matthews, 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