Introduction to Market Design - JEB141

• Title: Introduction to Market Design
• Czech title: Introduction to Market Design
• Guaranteed by: Institute of Economic Studies (23-IES)
• Faculty: Faculty of Social Sciences
• Actual: from 2017 to 2018
• Semester: winter
• E-Credits: 2
• Examination process: winter s.:combined
• Hours per week, examination: winter s.:3/0, Ex [HT]
• Capacity: 97 / unknown (unknown)
• Min. number of students: unlimited
• 4EU+: no
• Virtual mobility / capacity: no
• State of the course: taught
• Language: English
• Teaching methods: full-time
• Note: course can be enrolled in outside the 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

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.

In AY 2018/19, the course will be offered in the week January 21-25, 2019 in Room 314, every day 12:00-13:30. There will be a take-home final exam.

Last update: Gregor Martin, doc. PhDr., Ph.D. (09.01.2019)

Literature

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.

Last update: Gregor Martin, doc. PhDr., Ph.D. (05.12.2017)

Teaching methods

In AY 2018/19, the course will be offered in the week January 21-25, 2019 in Room 314, every day 12:00-13:30. . 

Last update: Gregor Martin, doc. PhDr., Ph.D. (09.01.2019)

Requirements to the exam

The final exam will be a take­home: the students will work on it independently.

Last update: Gregor Martin, doc. PhDr., Ph.D. (01.10.2018)