Auction Market Design
(Osaka 2017 1st)
Auction Market Design | Microeconomic Analysis 1
オークション・マーケットデザイン | ミクロ経済分析1
Syllabus in English | 講義シラバス（日本語）
1st semester, Thursdays 1st (8:50-10:20), Seminar Room 1（演習室1）
Office Hours: Wednesdays 12:30 - 13:30
Last Update: July 7, 2017
Announcement | お知らせ
[17/5/11] --- There will be NO lecture on June 1st.
[17/4/20] --- The class room has been changed from Room 1 to Seminar Room 1 (演習室1), the second floor of the same building as we met last week.
[17/4/9] --- If you plan to attend this course (even if you are just sitting), please fill THIS FORM on-line! <= Important!
[17/2/10] --- The first lecture will be on April 13 (Thu). Lectures will be given in English, while your questions/comments as well as presentations can be Japanese.
Course Objective and Content | 講義概要・目的
We study economic research on auctions with primary focus on market design.
Our course consists of following four parts:
Introductory Auction Theory
Spectrum Auction Design
Evidence Based Analyses
Advances in Auctions
This course is mainly based on students' presentations of academic articles, most of which are surveys or chapters from textbooks.
Introductory lectures on auction theory will be provided in a first few classes by the instructor.
Learning Goals | 学習目標
To understand recent topics of auction research in economics, especially on market design issues.
To acquire basic analytical skills on auctions from theoretical, empirical and experimental perspectives.
Requirement / Prerequisite | 履修条件・受講条件
Microeconomics at advanced undergraduate level.
Grading Policy | 成績評価
Based on the presentation and final report.
Auditing students SHOULD also make presentation but need NOT submit the final report.
Presentation can be given in English or Japanese, but SLIDES (you are encouraged to use them) must be typed in ENGLISH. I plan to start inviting your presentation after first two or three classes.
Final report can be written in Japanese or English. Suggested length is 2 - 5 pages. Your report should be either
1) an original paper/idea on auction market design,
2) a referee report on a paper (which is not directly covered in class), or
3) a survey on a specific issue of auction market design.
Textbooks | 講義テキスト
Main Textbook
Klemperer, P., Auctions: Theory and Practice, 2004. Amazon
The following relevant parts will be distributed in class, so you need NOT purchase this book.
Note: Working paper version of each chapter can be downloaded from his website.
Chapter 2 --- Why Every Economist Should Learn Some Auction Theory
Chapter 3 --- What Really Matters in Auction Design
Chapter 4 --- Using and Abusing Auction Theory
Chapter 5 --- Overview of the European Auctions
Reference Handbooks
The Handbook of Experimental Economics, Volume 2, Edited by Kagel, J. H. & Roth, A. E. 2016. Amazon
Chapter 5 --- Roth, A. E., Experiments in Market Design
Chapter 9 --- Kagel, J. H. and Levin, D., Auctions: A Survey of Experimental Research
Handbook of Game Theory with Economic Applications, Volume 4, Edited by Young, H. P. and Zamir, S. 2015. Amazon
Chapter 7 --- Kaplan, T. R. and Zamir, S., Advances in Auctions
Chapter 8 --- Vohra, R. V., Combinatorial Auctions
Chapter 9 --- Nisan, N., Algorithmic Mechanism Design: Through the lens of Multiunit auctions
Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Vol. 1, Edited by Blundell R., Newey W. K. and Persson T. 2006. Amazon
Chapter 3 --- Jehiel, P. and Moldovanu, B., Allocative and Informational Externalities in Auctions and Related Mechanisms
Handbook of Industrial Organization, Volume 3, Edited by Armstrong M. and Porter R. 2004. Amazon
Chapter 32 --- Hendricks, K. and Porter, R. H., An Empirical Perspective on Auctions
Other Related Books
Krishna, V., Auction Theory: 2nd, 2009. Amazon
A standard and balanced textbook on auction theory at graduate level.
Milgrom, P., Putting Auction Theory to Work, 2004. Amazon 日本語訳
An advanced textbook on auctions that also cover lots of applications and design issues.
Borgers, T., An Introduction to the Theory of Mechanism Design, 2015. Amazon
Variety of issues on mechanism design are discussed through the auction framework.
Vulkan, N., Roth, A. E. and Neeman, Z. (Eds.), The Handbook of Market Design, 2013. Amazon
A reference handbook on market design.
Cramton, P. C., Shoham, Y., & Steinberg, R. (Eds.), Combinatorial Auctions, 2006. Amazon
A reference handbook on combinatorial auctions.
Hubbard, T. P. and Paarsch, H. J., Auctions, 2016. Amazon 日本語訳
A great introductory textbook on auction without any complicated mathematics.
Course Schedule | 講義日程
(First two lectures will be given by the instructor. All the rest consists of students' presentations.)
INTRODUCTORY AUCTION THEORY
Lecture 1. Introduction slide 4/13
References
Klemperer, Ch.1
Milgrom, Section 1. Getting to Work
Handout
Klemperer, Ch.1, Appendix
Lecture 2. Revenue Equivalence Theorem 4/20
Lecture 3. Auction Theory and More 4/27
Klemperer, Ch.2 --- Kawanaka
Klemperer, Ch.4 --- Shimodaira
<References>
Milgrom, Section 6. Auctions in Context
Lecture 4. Theory to Practice 5/11
Klemperer, Ch.3 --- Fang
Klemperer, Ch.5 --- Saruta
<References>
Milgrom, Section 7. Uniform Price Auctions
SPECTRUM AUCTION DESIGN
Lecture 5. Allocational Externalities 5/18
Jehiel, Moldovanu and Stacchetti (1996) --- Atlasaona Kgalajwe
Jehiel, P., Moldovanu, B., & Stacchetti, E. (1996). How (not) to sell nuclear weapons. American Economic Review, 814-829.
<References>
Jehiel, P., & Moldovanu, B. (2000). Auctions with downstream interaction among buyers. Rand journal of economics, 768-791.
Jehiel and Moldovanu (2006)
Lecture 6. Core-Selecting Auctions 7/6
Day and Milgrom (2008) --- Fang
Day, R., & Milgrom, P. (2008). Core-selecting package auctions. International Journal of Game Theory, 36(3-4), 393-407.
<References>
Goeree, J. K., & Lien, Y. (2016). On the impossibility of core‐selecting auctions. Theoretical Economics, 11(1), 41-52.
Milgrom, Section 8. Package Auctions and Combinatorial Bidding
Lecture 7. Recent Spectrum Auctions 6/8
Cramton (2013) --- (withdrawal)
Cramton (2017) --- Alberic
Cramton, P. (2013). Spectrum auction design. Review of Industrial Organization, 42(2), 161-190.
Cramton, P. and Ockenfels, A. (2016). The German 4G Spectrum Auction: Design and Behavior, forthcoming, Economics Journal, 2017.
Note: Papers by Prof. Peter Cramton can be downloaded from his website.
Lecture 8. US Incentive Auctions
Cramton (2011)
Cramton et.al (2015)
Cramton, P. (2011). Incentive Auctions, Working Paper, University of Maryland.
Cramton, P., Hector Lopez, Malec, H. D. and Sujarittanonta, P. (2015). Design of the Reverse Auction in the Broadcast Incentive Auction, Working Paper, University of Maryland.
Note: Papers by Prof. Peter Cramton can be downloaded from his website.
EVIDENCE BASED ANALYSES
Lecture 9. Experiments in Auctions 6/15
Kagel and Levin (2016) --- Chalil
<References>
Fréchette, G. R., Kagel, J. H., & Morelli, M. (2012). Pork versus public goods: an experimental study of public good provision within a legislative bargaining framework. Economic Theory, 49(3), 779-800.
Lecture 11. Empirical Studies 6/22
Hendricks and Porter (2004) --- Yamamoto
Lecture 10. Experiments in Market Design 6/29
Roth (2016) --- Shimodaira
Lecture 12. Evidence and Theory 7/13
Budish (2011) --- xx
Budish and Cantillon (2012) --- xx
Budish, E. (2011). The combinatorial assignment problem: Approximate competitive equilibrium from equal incomes. Journal of Political Economy, 119(6), 1061-1103.
Budish, E., & Cantillon, E. (2012). The multi-unit assignment problem: Theory and evidence from course allocation at Harvard. American Economic Review, 102(5), 2237-2271.
ADVANCES IN MARKET DESIGN
Lecture 13. New Practical Design 7/20
Budish et.al (2014) --- Chalil
Budish, E., Cramton, P., and Shim, J. (2014). Implementation Details for Frequent Batch Auctions: Slowing Down Markets to the Blink of an Eye. American Economic Review, Vol 104, No 5 pp.418-24.
Budish, E., Cramton, P., & Shim, J. (2015). The high-frequency trading arms race: Frequent batch auctions as a market design response. Quarterly Journal of Economics, 130(4), 1547-1621.
Schummer, J., & Vohra, R. V. (2013). Assignment of arrival slots. American Economic Journal: Microeconomics, 5(2), 164-185.
Lecture 14. Combinatorial Auctions
Vohra (2015) --- xx
Lecture 15. Algorithmic Mechanism Design
Nisan (2015) --- xx
Other Topics
See the website for auction theory. Students may want to choose a paper there.
In such a case, please pick a paper that has not been presented by any student.
Papers | 論文
Chapter 1 --- A Survey of Auction Theory
Survey Articles
*McAfee, R. P., & McMillan, J. (1987). Auctions and bidding. Journal of economic literature, 25(2), 699-738.
Athey, S., & Haile, P. A. (2007). Nonparametric approaches to auctions. Handbook of econometrics, 6, 3847-3965.
Dasgupta, S., & Hansen, R. (2008). Auctions in corporate finance. handbook of Corporate Finance, 87-143.
Dechenaux, E., Kovenock, D., & Sheremeta, R. M. (2015). A survey of experimental research on contests, all-pay auctions and tournaments. Experimental Economics, 18(4), 609-669.
*Klemperer, P. (1999). Auction theory: A guide to the literature. Journal of economic surveys, 13(3), 227-286.
Lucking‐Reiley, D. (2000). Auctions on the Internet: What’s being auctioned, and how?. The journal of industrial economics, 48(3), 227-252.
Maskin, E. (2004). The unity of auction theory: Milgrom's masterclass. Journal of Economic Literature, 42(4), 1102-1115.
Milgrom, P. (1989). Auctions and bidding: A primer. The Journal of Economic Perspectives, 3(3), 3-22.
Wolfstetter, E. (1996). Auctions: an introduction. Journal of economic surveys,10(4), 367-420.
Other Related Papers
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Anton, J. J., & Yao, D. A. (1992). Coordination in split award auctions. The Quarterly Journal of Economics, 681-707.
Anton, J. J., & Yao, D. A. (1989). Split awards, procurement, and innovation.The RAND Journal of Economics, 538-552.
Aoyagi, M. (2003). Bid rotation and collusion in repeated auctions. Journal of Economic Theory, 112(1), 79-105.
Ashenfelter, O. (1989). How auctions work for wine and art. The Journal of Economic Perspectives, 3(3), 23-36.
Asker, J., & Cantillon, E. (2008). Properties of scoring auctions. The RAND Journal of Economics, 39(1), 69-85.
Athey, S., & Bagwell, K. (2001). Optimal collusion with private information. RAND Journal of Economics, 32(3), 428-465.
Athey, S., Bagwell, K., & Sanchirico, C. (2004). Collusion and price rigidity. The Review of Economic Studies, 71(2), 317-349.
Ausubel, L. M. (2004). An efficient ascending-bid auction for multiple objects. American Economic Review, 1452-1475.
Ausubel, L. M. (2006). An efficient dynamic auction for heterogeneous commodities. The American economic review, 602-629.
Avery, C. (1998). Strategic jump bidding in English auctions. The Review of Economic Studies, 65(2), 185-210.
Bajari, P., & Hortacsu, A. (2003). The winner's curse, reserve prices, and endogenous entry: Empirical insights from eBay auctions. RAND Journal of Economics, 329-355.
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Branco, F. (1997). The design of multidimensional auctions. The RAND Journal of Economics, 63-81.
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Budish, E. B., & Takeyama, L. N. (2001). Buy prices in online auctions: irrationality on the internet?. Economics letters, 72(3), 325-333.
Bulow, J., & Klemperer, P. (1996). Auctions Versus Negotiations. The American Economic Review, 86(1), 180-194.
Bulow, J., & Klemperer, P. (1999). The generalized war of attrition. The American Economic Review, 89(1), 175.
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Che, Y. K., & Gale, I. (1998a). Standard auctions with financially constrained bidders. The Review of Economic Studies, 65(1), 1-21.
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Che, Y. K., & Gale, I. (2000b). Difference-form contests and the robustness of all-pay auctions. Games and Economic Behavior, 30(1), 22-43.
Che, Y. K., & Gale, I. (2003). Optimal design of research contests. The American Economic Review, 93(3), 646-671.
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Klemperer, P. (1998). Auctions with almost common values: The Wallet Game and its applications. European Economic Review, 42(3), 757-769.
Klemperer, P. (2002). What really matters in auction design. The Journal of Economic Perspectives, 16(1), 169-189.
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