Learning Outcomes
The course will provide an introduction to the core concepts of auction theory. The learning experience will be enriched with case studies from auctions in the lab and in the field. Successful participants can solve optimal-bidding problems in standard auction forms, using advanced mathematical techniques. They first model the informational environment in a given application, using probability theory, and, second, use optimization theory to find optimal bidding strategies. Insights from mechanism design will enable them to design and solve novel auction formats. They learn to model both roles in seller-buyer environments.
Content
Optimal bidding in single-unit auctions with symmetric independent private values: First-price auctions, second-price auctions, all-pay auctions; the revenue-equivalence theorem; risk-averse bidders; asymmetric bidders; optimal auctions and mechanism design; interdependent values, multi-unit auctions.
Description of Teaching and Learning Methods
The insights from the lecture are enhanced by solving problem sets in tutorials.
