Reading Group

CAASI FA 19 : Econ meets CS: Mechanism Design and Applications
The goal of this reading group is to learn (or review) together the economic approach to institutional design with an eye towards real world applications in human / public services and how computational approaches can help address the limitations of the economic approach. We plan to go deeply into very few readings (see below) that establish the theoretical framework of this Econ+CS approach and use this as a jumping off point to other reading as determined by the interest of the reading group. We will mostly work together on models and equations on the board to deepen our understanding, so you need to be comfortable with mathematical representations, but no previous knowledge in either economics or CS is expected.
Organizer: Sera Linardi and Jinyong Jeong
E-Mail: jinyong.jeong at pitt dot edu
Day/Time: Tuesday 11am-12pm
Location: Posvar Hall 3425 (Sera’s office) or 3412 (if we need more room).

Introduction: Mechanism design is “reverse game theory”: instead of starting with a game and solving for the outcome, we start from a desired outcome (for example, social welfare maximization) and design an institution / mechanism that would accomplish it. While this branch of economics has much practical / policy relevance, the methods of analysis is fairly abstract and results are restricted to certain environments. Computer science approaches, such as the focus on complexity and approximation and the use of simulations, provide a necessary bridge between mechanism design in theory and its implementation in practice. As examples of application we will also discuss Matching and Market Design, which is one of the most practical fields in Economics, with real world applications in school choice, organ exchange, doctor-hospital match, among many others.

Partial reading list (more to be added depending on group interest):

  • 9/3/2019: Sera Linardi: Intro
    Blume, L., Easley, D., Kleinberg, J., Kleinberg, R., & Tardos, É. (2015). Introduction to computer science and economic theory. Journal of Economic Theory, 156, 1-13. Link

  • 9/10/2019: Sera Linardi: Computational efficiency vs assumption on private values.
    Nisan, N. (2014). Algorithmic mechanism design (AMD) Link Section 2-4.2.

  • 9/17/2019:
    Lingfei Wu: AMD Section 4.3: Intractability, NP completeness
    Sera Linardi: AMD Section 4.4: Approximate optimality
    Jinyong Jeong: AMD Section 5: Payments, incentives, and mechanisms

  • 9/24/2019:
    Jinyong Jeong: continue AMD Section 5: Vickrey–Clarke–Groves (VCG) mechanism
    Rena Sung: Cason, T. N., Saijo, T., Sjöström, T., & Yamato, T. (2006). Secure implementation experiments: Do strategy-proof mechanisms really work?. Games and Economic Behavior, 57(2), 206-235.
    Extra: Operations Research Forum: debate on whether VCG is practical. Link

  • 9/31/2019:
    Sera Linardi: wrap up theoretical mechanism design discussion for now
    Lingfei Wu: Economic Complexity Index
    Hidalgo, C. A., Klinger, B., Barabási, A. L., & Hausmann, R. (2007). The product space conditions the development of nations. Science, 317(5837), 482-487.
    Hidalgo, C. A., & Hausmann, R. (2009). The building blocks of economic complexity. Proceedings of the national academy of sciences, 106(26), 10570-10575.

  • 10/6/2019: Pengshan Pan
    application of mechanism design to land trade and development. Link

  • 10/13-20/2019: Jinyong Jeong
    Budish, E., & Cantillon, E. (2012). The multi-unit assignment problem: Theory and evidence from course allocation at Harvard. American Economic Review, 102(5), 2237-71. Link

  • 10/27/2019: Benjamin Ignacio Matta Serrano
    eliminating justified envy vs just: Morrill, T. (2015). Making just school assignments. Games and Economic Behavior, 92, 18-27.

  • 11/5/2019: Nicolas Raul Pastrian Contador
    Jose Correa, Rafael Epstein, Juan Escobar, Ignacio Rios, Bastian Bahamondes, Carlos Bonet, Natalie Epstein, Nicolas Aramayo, Martin Castillo, Andres Cristi, and Boris Epstein. 2019. School Choice in Chile. In ACM EC
    ’19: ACM Conference on Economics and Computation (EC ’19), June 24–28, 2019, Phoenix, AZ, USA. ACM, New York, NY, USA, 19 pages.

  • 11/12/2019:
    Everyone: write a setup for a matching problem

  • 11/19/2019:
    Budish, E. (2012). Matching versus mechanism design. ACM SIGecom Exchanges, 11(2), 4-15. Link 1 Link 2
Reference book:

  • Börgers, T. (2015). An introduction to the theory of mechanism design. Oxford University Press, USA.
  • Sandholm, T. (2008). Computing in mechanism design. The New Palgrave Dictionary of Economics: Volume 1–8, 994-1002. Link