35V3A5 :Auctions, Bargaining and Networks

Algemeen

Voertaal Engels
Werkvorm: 3 Contact hours a week (Geen informatie over collegetijden bekend)
Tentamenvorm: Written exam (Tentamenrooster)
Niveau:Bachelor
Studielast:6 ECTS credits
Inschrijving:Blackboard
Blackboard informatieLink to Blackboard (Als u de melding 'Guest are not allowed in this course' krijgt, dient u nog bij Blackboard in te loggen)

Docent(en)


prof. dr. A.J.J. Talman (Coordinator)

dr. R.L.P. Hendrickx


Doel van de cursus (alleen in het Engels beschikbaar)

The student can

  • analyse any (possible new) bargaining rule in tems of its properties
  • prove axiomatic characterizations of the egalitarian, Nash and Raiffa-Kalai-Smorodinsky
    bargaining rules
  • perform an equilibrium analysis of any alternate-offer bargaining game in extensive form
  • calculate centrality and power measures of networks
  • apply the Shapley value to network-related applications
  • analyse networks in terms of their information and secrecy qualities
  • calculate a Bayesian Nash equilibrium for any standard auction
  • recognize an auction in real-life applications and model it appropiately
  • check whether any pair of auctions is revenue equivalent
  • determine the benefits and the optimal reservation price or entry fee in an auction


Inhoud van de cursus (alleen in het Engels beschikbaar)

The course Auctions, Bargaining and Networks presents a thorough introduction to modern theories of incomplete and imperfect markets, using both a (non-cooperative) equilibrium approach and a (cooperative) axiomatic approach.

The first part of the course deals with bargaining problems. In a bargaining problem, agents face a division problem in which an outside option (threat) plays a role. This problem is studied from two opposing points of view. First, the axiomatic approach answers the question how such division problems should be solved in a fair way. Second, the non-cooperative approach studies games in extensive form where the players make alternate offers and analyses sub-game perfect Nash equilibria of these games.

In the second part of the course, the focus is on networks. First we develop an important new cooperative tool, Transferable Utility games, and the related notion of Shapley value. This tool is used to study properties of (communication) graphs, such as centrality and power of nodes. These theoretical concepts culminate in an application to the optimal design of covert networks.

The third part of the course consists of the theory of auctions. In an auction a seller wants to sell an indivisible good to one of several agents. These potential buyers pose a bid and the rules of the auction determine who gets the object and how much each bidder has to pay to the seller. Several types of auctions (Dutch, English, first-price and second price sealed-bid, all-pay) and real-life applications (UMTS, petrol station, licenses, radio frequencies) are discussed. The main analytic tool is the concept of Bayesian Nash equilibrium from non-cooperative game theory. It is studied under which assumptions different standard auctions are revenue equivalent and which optimal reservation price or entrée fee maximizes the revenue of the seller.


Verplichte literatuur

  1. Lecture notes.


Aanbevolen literatuur

  1. Krishna V., Auction Theory, Academic Press, 2002.


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(25-aug-2017)