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Course, academic year 2017/2018
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Introduction to Market Design - JEB141
English title: Introduction to Market Design
Guaranteed by: Institute of Economic Studies (23-IES)
Faculty: Faculty of Social Sciences
Actual: from 2017
Semester: winter
Points: 2
E-Credits: 2
Examination process: winter s.:combined
Hours per week, examination: winter s.:3/0 Ex [hours/week]
Capacity: 97 / unknown (unknown)
Min. number of students: unlimited
State of the course: taught
Language: English
Teaching methods: full-time
Note: it is possible to enroll in the course outside of study plan
enabled for web enrollment
priority enrollment if the course is part of the study plan
Guarantor: Bc. Jakub Kastl
doc. PhDr. Martin Gregor, Ph.D.
Teacher(s): doc. PhDr. Martin Gregor, Ph.D.
Bc. Jakub Kastl
Annotation
Last update: doc. PhDr. Martin Gregor, Ph.D. (05.12.2017)

This is an advanced undergraduate course introducing the students to the issues of market design: how to solve problems of economic resource allocation via markets. We will pay special attention to markets where prices cannot be used to match supply and demand. We will begin by studying matching algorithms: how to match doctors to hospitals, how to design an exchange for organ transplants, how to match students to schools or dormitories etc. We will prove some important results about properties of some of the leading matching algorithms. We will also look at data to investigate empirically (and experimentally) why some centralized clearing houses might have failed and some survived. Depending on time we will also look at issues caused by asymmetric information: why some markets may unravel completely when asymmetric information between sellers and buyers might be present and how this can be solved.
Literature
Last update: doc. PhDr. Martin Gregor, Ph.D. (05.12.2017)

Introductory reading:

Roth, Alvin: "What Have We Learned from Market Design?", The Economic Journal, Vol. 118, No. 527, Conference Papers (Mar., 2008), pp. 285­310. http://www.jstor.org/stable/20108798

Suggested sources:

A book that covers a lot of topics in Market Design that I recommend:

  • Roth, Alvin, Who Gets What - and Why, Houghton Mifflin Harcourt, 2015

An interesting book with a lot of interesting stories about various markets and market failures from the past:

  • McMillan, John, Reinventing the Bazaar: A Natural History of Markets, Norton, 2003.

A subset of papers that address the topics we will cover:

  • Akerlof, G.: "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Vol. 84, No. 3 (Aug., 1970), pp. 488­-500. http://www.jstor.org/stable/1879431
  • Gale, D., Shapley, L.: "College Admissions and the Stability of Marriage," The American Mathematical Monthly, Vol.. 69, No. 1 (Jan., 1962), 9­15 http://www.jstor.org/stable/10.4169/amer.math.monthly.120.05.386
  • Roth, A.: "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, Vol. 92, No. 6 (Dec., 1984), pp. 991-­1016.
  • Roth, A., and Peranson, E.: "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," The American Economic Review, Vol. 89, No. 4 (Sep., 1999), pp. 748­-780.
Teaching methods
Last update: Ing. Dagmar Schnellerová (02.01.2018)

The class will meet (subject to further changes) on January 10, January 11 from 14:00 to 17:00 in room 314 and January 12, 2018 from 9:00 to 12:00 in room 314.

Requirements to the exam
Last update: doc. PhDr. Martin Gregor, Ph.D. (29.01.2018)

The final exam will be a take­home: the students will work on it independently. In the year 2017/2018, the exam is graded as follows:

A: 170+
B: 150-169
C: 130-149
D: 99-129
E: 80-98
F: 0-79

 
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