Auctions and Game Theory - JEB160

• Anglický název: Auctions and Game Theory
• Český název: Auctions and Game Theory
• Zajišťuje: Institut ekonomických studií (23-IES)
• Fakulta: Fakulta sociálních věd
• Platnost: od 2024
• Semestr: letní
• E-Kredity: 5
• Způsob provedení zkoušky: letní s.:písemná
• Rozsah, examinace: letní s.:2/0, Zk [HT]
• Počet míst: neomezen / neurčen (neurčen)
• Minimální obsazenost: neomezen
• 4EU+: ne
• Virtuální mobilita / počet míst pro virtuální mobilitu: ne
• Stav předmětu: vyučován
• Jazyk výuky: angličtina
• Způsob výuky: prezenční
• Poznámka: předmět je možno zapsat mimo plán; povolen pro zápis po webu
• Garant: doc. PhDr. Martin Gregor, Ph.D.
• Vyučující: doc. PhDr. Martin Gregor, Ph.D.
• Třída: Courses for incoming students
• Neslučitelnost : JEB064
• Prerekvizity : JEB108
• Je neslučitelnost pro: JEB064

Anotace

A key interest of economists is to understand and design mechanisms for allocating resources among competing agents. To that end, we will study the design of auctions, tournaments, and contests, with applications covering Treasury bills auctions, spectrum auctions, ad auctions, corporate takeovers, promotion tournaments, grant schemes, innovation prizes, and even bank resolution policies.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (14.02.2025)

Cíl předmětu

Students should learn in detail the differences between a private value auction and an auction in common values, and the differences in auction mechanisms (ascending-bid, descending-bid, sealed bid, and first price v. second price auctions). Students should be able to construct bidding strategies in various auction environments. Students will also learn fundamentals in game theory that underline auction theory and fundamentals of non-parametric estimation from auction data.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (14.02.2025)

Podmínky zakončení předmětu

2 assignments (40%)

1 written final exam (60%)

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (14.02.2025)

Literatura

Textbooks

Krishna, V. (2009). Auction Theory. Academic Press/Elsevier.

Mas-Colell, A., Whinston, M. D., Green, J. R. (1995). Microeconomic theory. New York: Oxford University Press, Chapters 6AB.

Menezes, F. M., Monteiro, P. K. (2005). An Introduction to Auction Theory. OUP Oxford.

Tadelis, S. (2013). Game Theory: An Introduction. Princeton University Press.

 

Extra Readings (TBC)

Asker, J., Fershtman, C., Pakes, A. (2024). The impact of artificial intelligence design on pricing. Journal of Economics & Management Strategy, 33(2), 276-304.

Aumann, R. J. (2019). A synthesis of behavioural and mainstream economics. Nature Human Behaviour, 3(7), 666-670.

Blavatskyy, P., Ortmann, A., Panchenko, V. (2022). On the experimental robustness of the Allais paradox. American Economic Journal: Microeconomics, 14(1), 143-163.

Eckbo, B. E., Malenko, A., Thorburn, K. S. (2024). Corporate Takeovers: Theory and Evidence. European Corporate Governance Institute–Finance Working Paper.

Hortaçsu, A., Luco, F., Puller, S. L., Zhu, D. (2019). Does strategic ability affect efficiency? Evidence from electricity markets. American Economic Review, 109(12), 4302-4342.

Li, S. (2024). Designing Simple Mechanisms. Journal of Economic Perspectives, 38(4), 175-192.

Miller, J. B., Sanjurjo, A. (2018). Surprised by the hot hand fallacy? A truth in the law of small numbers. Econometrica, 86(6), 2019-2047.

Philippon, T., Wang, O. (2023). Let the worst one fail: a credible solution to the too-big-to-fail conundrum. The Quarterly Journal of Economics, 138(2), 1233-1271.

Prendergast, C. (2017). How food banks use markets to feed the poor. Journal of Economic Perspectives, 31(4), 145-162.

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (17.03.2025)

Metody výuky

We will be meeting once a week. The class will be a mixed lecture/tutorial style.

The course begins on February 25. (The class on February 18 will not be held.)

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (03.02.2025)

Sylabus

I. Toolkit

1A. Preliminaries 

• Why Auctions?
• Order Statistics

Application: Food America (Prendergast, 2017)

1B. Single-Person Decision Problems: Rationality

• Rationality
• Hot hand fallacy
• Allais paradox
• Ellsberg experiment

Application: Allais Paradox (Blavatskyy et al., 2022)

Application: Hot hand fallacy (Miller and Sanjurjo, 2018)

Textbook: Tadelis (2013), Chapters 1 and 2; Mas-Collel et al. (1995), Chapters 6AB

1C. N-Person Decision Problems: Static Games

• Essentials of non-cooperative game theory
• Static games with pure strategies under complete information

Application: k-level reasoning in Texas electricity markets (Hortascu et al., 2019)

Application: Algorithmic pricing (Asker et al., 2023)

Textbook: Tadelis (2015), Chapters 3 and 5

c)    II. Auctions

2. Independent Private Values Environment

• First- and second-price sealed bid auctions
• IPV environments (symmetric and asymmetric)
• Truthfulness with and without IPV
• Static games with pure strategies under incomplete information
• Revenue Equivalence Theorem

Textbook: Krishna (2009), Chapter 2; Tadelis (2013), Chapter 12

Application: Google’s AdX, Project Bernanke

3. Common Values Environment

• The winner’s curse
• When do prices aggregate information?

Application: Oil lease auctions

III. Tournaments and Contests

• All-pay Auctions
• Tullock Lotteries

Application: Bank resolution (Philippon and Wang, 2023)

IV. Extras

5. Multi-Unit Auctions

• Sequential share auction

Application: Canadian Treasury Bill auctions (Kastl, 2020)

6. What Matters in Auction Design?

• Transaction costs
• Optimal reserve price
• Default costs
• Bid rigging
• Simplicity
• Snipe quotes, continuous trading vs. batch auctions
• Fixed and flexible deadlines: eBay vs. Amazon
• Complementarities

Application: e-Bay

7.  Empirical Toolkit

Poslední úprava: Gregor Martin, doc. PhDr., Ph.D. (18.03.2025)