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2019/2020 KAN-CMECV1246U Auctions: Introduction to the Theory and its Application
| English Title | |
| Auctions: Introduction to the Theory and its Application |
Course information |
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| Language | English |
| Course ECTS | 7.5 ECTS |
| Type | Elective |
| Level | Full Degree Master |
| Duration | One Semester |
| Start time of the course | Spring |
| Timetable | Course schedule will be posted at calendar.cbs.dk |
| Max. participants | 40 |
| Study board |
Study Board for HA/cand.merc. i erhvervsøkonomi og matematik,
MSc
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| Last updated on 21-02-2019 | |
Relevant links |
| Learning objectives | ||||||||||||||||||||||
After having attended the course the students
should be able
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| Course prerequisites | ||||||||||||||||||||||
| 1. Microeconomics and game theory on the HA math
level. Students who do not have knowledge of these topics at the
same level, but still wish to enroll, should be prepared to work
harder to catch up.
2. Having attended the course Economics of Information and Contracts is not a prerequisite but might be beneficial. |
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The aim of the course is to give the students an introduction to auction theory and how this theory can be applied to real world situations where auction mechanisms are used or which can be analyzed with the tools from auction theory.
Auctions or auction-like mechanisms are used in many real world situations. Examples range from auctions of fresh food products (the regular fish auctions in Hanstholm) or agricultural inputs (the cattle auctions in Aars) to art auctions (Sotheby’s in London), spectrum auction (the 5G auction of the US American Regulator FCC), electricity auctions (the day-ahead Nord Pool spot market) or treasury auctions (the treasury auctions of the Federal Reserve Bank in New York). However, why are auctions so often used to allocate products? Under which circumstances are auctions particularly well suited to sell an object, compared to other selling mechanisms? What are the optimal bidding strategies of buyers in different auction formats? Which auction formats should sellers choose, if they want to maximize their revenues? These and other questions are addressed by auction theory which analyses auctions as games of incomplete information.
First the students are introduced into different types of auctions. Then they will learn under which circumstances the famous revenue equivalence principle applies and what one can conclude from this principle. Naturally we will also discuss under which circumstances the principle cannot be applied. Afterwards we will highlight the relationship between auction theory and mechanism design theory. Finally, if time allows, we will widen our horizon and consider multi-unit instead of single object auctions.
During the whole course we will relate the theory to real world examples and discuss real world evidence from field data or from experiments which should give the students an idea whether the results from auction theory can be applied in practice. |
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| Description of the teaching methods | ||||||||||||||||||||||
| Mainly lectures, combined with classroom experiments and the solution of some exercises | ||||||||||||||||||||||
| Feedback during the teaching period | ||||||||||||||||||||||
| In addition to office hours and email communications, it is expected that the students actively participate in the course and take over small presentations where they will get dialog-based feed-back. | ||||||||||||||||||||||
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