A list of topics by session is available in the calendar below.
Course Meeting Times
Lectures: 1 session / week, 1.5 hours / session
Description
This course is an advanced topics course on market and mechanism design. We will study existing or new market institutions, understand their properties, and think about whether they can be re-engineered or improved. Topics discussed include mechanism design, auction theory, one-sided matching in house allocation, two-sided matching, stochastic matching mechanisms, student assignment, and school choice.
Prerequisites
This course assumes knowledge of the first year economics Ph.D. sequence, especially of microeconomic theory: 14.121-14.124 Microeconomic Theory I-IV, 14.451 Dynamic Optimization Methods with Applications, 14.452 Economic Growth, 14.453 Economic Fluctuations, and 14.454 Economic Crises. 14.126 Game Theory and courses from the industrial organization sequence (14.271 Industrial Organization I and 14.272 Industrial Organization II) are helpful but not essential background.
Recommended Textbooks
Milgrom, Paul. Putting Auction Theory to Work. Cambridge, United Kingdom: Cambridge University Press, 2004. ISBN: 9780521536721.
Roth, Alvin, and Marilda Sotomayor. Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis. Cambridge, United Kingdom: Cambridge University Press, 1992. ISBN: 9780521437882.
Additional books of interest are found in readings.
Course Organization
Course Goals and Expectations
The aim of this course is to get students to the research frontier. We will spend most of the course reading and discussing research papers. The first few classes I will have lectures on some important background material. Once the basics are covered, we will develop some of the recent themes of market design with an emphasis on areas where there has been recent activity, and where I think there is scope for additional work. Some of this will be open-ended and the idea is to spur discussion. It will be critical that students read the papers in this class to facilitate the discussion and depending on enrollment and participation, we may ask students to present papers.
Course Requirements
The requirements for this course are to write three referee reports and a research paper. The referee reports are due on Ses #3, Ses #5, and Ses #7. The papers students may write referee reports on are labeled in the readings. If there is a paper that you think is relevant which is not on the list, please come see me.
A short progress report on the research paper is due one week after Ses #7, and the final paper is due at the end of the January Independent Activities Period (IAP), with no exceptions. The hope is that good papers form a foundation for dissertation work. I will meet with students in the middle of January to check the progress of the paper.
Grading
| ACTIVITIES | PERCENTAGES |
|---|---|
| Participation | 20% |
| Referee reports (10% each) | 30% |
| Final paper | 50% |
Calendar
| SES # | TOPICS | KEY DATES |
|---|---|---|
| 1 | Introduction and motivations | |
| 2 | Basic mechanism design and auction theory | |
| 3 | More mechanism design and auction theory | Referee report 1 due |
| 4 | One-sided matching: house allocation and market problems | |
| 5 | Two-sided matching: stability, many-to-one vs. one-to-one, and small cores in large markets | Referee report 2 due |
| 6 | Stochastic matching mechanisms | |
| 7 | Student assignment and school choice | Referee report 3 due, final paper proposal due 1 week after Ses #7, and final paper due 6 weeks after Ses #7 |
