Economics 415: Market Design
[Syllabus
| Class List]
Professor Peter Cramton
Tuesday and Thursday, 11 am to 12:15 pm, Tydings 0111, Spring 2006
Economists increasingly are asked to design markets in restructured industries to promote desirable outcomes. This course studies the new field of market design. The ideas from game theory and microeconomics are applied to the design of effective market rules. Examples include electricity markets, spectrum auctions, environmental auctions, and auctions of takeoff and landing slots at congested airports. The emphasis is on both the design of high-stake auction markets and bidding behavior in these markets.
Prerequisite: A vivid imagination and a tolerance for abstraction are essential prerequisites for this course. In addition, Economics 414 (Game Theory) or consent of the instructor is required of all students. If you struggled in Economics 414 (C or worse), then this course is not for you.
Course Materials
Textbook:Combinatorial Auctions,
MIT Press, 2006
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Web exercises can be found at http://gametheory.tau.ac.il/student/. Your user name is CR623U<email>, where <email> is your email address (e.g., CR623Ustudent@email.com). The class password is t458441Vt. It is case sensitive.
Project Assignment
Project Ideas
Presentation Schedule
Sample Papers: Airport Slot
Allocation,
Fantasy Baseball,
FCC Package Auctions,
Internet Auctions,
International Conflict,
Pool House Rules
Web Exercise 1 Web Exercise 2 Web Exercise 3 Web Exercise 4 Web Exercise 5
Auction Rules Exercise Problem Set Problem Set Answers Topics
* indicates papers emphasized in class.
*McAfee, R. Preston and John McMillan. 1987. “Auctions and Bidding,” Journal of Economic Literature, 25, 699-738. [presentation]
*Cramton, Peter. 2001. "Auction Design and Strategy," Presentation, University of Maryland.
Cramton, Peter. 1998. “Ascending Auctions,” European Economic Review, 42, 745-756. [presentation]
Lawrence M. Ausubel and Peter Cramton, "Auctioning Many Divisible Goods," Journal of the European Economic Association, 2, 480-493, April-May 2004.
Ausubel, Lawrence M. and Peter Cramton. 2002. “Demand Reduction and Inefficiency in Multi-Unit Auctions,” Working Paper, University of Maryland. [presentation]
*Ausubel, Lawrence M. and Peter Cramton. 1999. “The Optimality of Being Efficient,” Working Paper, University of Maryland. [presentation]
*Cramton, Peter. 2002. “Spectrum Auctions,” in Martin Cave, Sumit Majumdar, and Ingo Vogelsang, eds., Handbook of Telecommunications Economics, Amsterdam: Elsevier Science B.V., Chapter 14, 605-639, 2002. [Presentation]
*Cramton, Peter and Jesse Schwartz. 2003. “Collusive Bidding in the FCC Spectrum Auctions,” Contributions to Economic Analysis & Policy, 1:1. [presentation]
Roth, Alvin E., Web Site covering market design, especially matching.
*Immorlica, Nicole and Mohammad Mahdian, "Marriage, Honesty, and Stability," presentation, 2005.
*Ausubel, Lawrence M. and Paul Milgrom. 2002. “Ascending Auctions with Package Bidding,” Frontiers of Theoretical Economics: Vol. 1: No. 1, Article 1. http://www.bepress.com/bejte/frontiers/vol1/iss1/art1. [presentation]
*Ausubel, Lawrence M., Peter Cramton, and Paul Milgrom, "The Clock-Proxy Auction: A Practical Combinatorial Auction Design," in Peter Cramton, Yoav Shoham, and Richard Steinberg (eds.), Combinatorial Auctions, Chapter 5, MIT Press, 2006. [presentation]
*"The Convergence of Market Designs for Adequate Generating Capacity," (with Steven Stoft), Working Paper, University of Maryland, March 2006. [presentation]
Kahn, Alfred E., Peter Cramton, Robert H. Porter, and Richard D. Tabors. 2001. “Pricing in the California Power Exchange Electricity Market: Should California Switch from Uniform Pricing to Pay-as-Bid Pricing?” Blue Ribbon Panel Report, California Power Exchange.
Wolak, Frank A.. 2001. “What Went Wrong in California's Restructured Electricity Market?” Presentation at AEI.