Lecture: Economics and Computation (Fall 2014)

Lecturer: Prof. Dr. Sven Seuken
Teaching Assistants: Gianluca Brero, Dmitry Moor, Steffen Schuldenzucker, Timo Mennle, Michael Weiss
Teaching Language English
Level BSc, MSc
Academic Semester Fall 2014
Time and Location Tuesdays, 12:15 - 13:45 in BIN 2.A.10 (Lecture)
Wednesdays, 12:15 - 13:45 in BIN 2.A.01 (Exercises)
AP (ECTS): 6 (including a mark)
Office Hours Prof. Dr. Sven Seuken: email for appointments, BIN-2.A.28

Course Content

In this course, we will cover the interplay between economic thinking and computational thinking as it relates to electronic commerce in particular, and socio-economic systems in general. Topics covered include: game theory, mechanism design, p2p file-sharing, eBay auctions, advertising auctions, combinatorial auctions, matching markets, computational social choice, and crowdsourcing markets. Emphasis will be given to core methodologies necessary to design such systems with good economic and computational properties. Students will be engaged in theoretical, computational, and empirical exercises.


  • 17.12.2014: The post-exam review will take place on Thursday, December 18, 2014 at 16:00-17:00 in room BIN 2.A.25.
  • 3.12.2014: The exam will be held from 12:15 till 13:45 on Tuesday, December 16, 2014 in room 2.A.10 (same as lecture).
  • 25.11.2014: Please note that there will not be a homework assignment on Crowdsourcing.
  • 16.9.2014: The NB platform for reading and discussion lecture materials now online - please register!
  • 8.9.2014: Interested students must register with OLAT by enrolling for "MINF4530: Economics and Computation". This will also grant access to course materials and you will receive all course-related communication.
  • 1.8.2014: Tentative course schedule posted.

Lectures (tentative schedule)

Lecture Date Topic/Reading Comprehension Questions Fun & Interesting
1 Tue, 16.9.2014 Incentives
2 Tue, 23.9.2014 Game Theory (skip Sections 2.7 and 2.8) CQ2 Game Theory,
Primates & Game Theory ,
Badminton & Game Theory (jump to 15:00) (explanation)
3 Tue, 30.09.2014 The Economics of P2P File Sharing (skip Section 4.5.4) CQ3 Court...
4 Tue, 7.10.2014 Auction Theory and eBay (optional: 6.4, 6.6.3, 6.6.4) CQ4 eBay
5 Tue, 14.10.2014 Mechanism Design (optional: 7.3.3 and 7.4) CQ5 restaurant pricing
6 Tue, 21.10.2014 Online Advertising Auctions CQ6 online ads
7 Tue, 28.10.2014 Linear Programming (optional: 3.3 and 3.4) CQ7
8 Tue, 4.11.2014 Integer Programming (optional 12.2, 12.4, 12.7, 12.8) CQ8 NP-hard
9 Tue, 11.11.2014 Combinatorial Auctions (optional: 11.4.2) CQ9
10 Tue, 18.11.2014 Matching Markets (optional: 12.4.4 and 12.4.5) CQ10 Kidney markets
11 Tue, 25.11.2014 Computational Social Choice (optional: 15.2) CQ11 Elections
12 Tue, 2.12.2014 Crowdsourcing Markets and Contests CQ12 Crowdsourcing
13 Tue, 9.12.2014 Review CQ13
14 Tue, 16.12.2014
at 12:15 - 13:45
Final Exam: in room 2.A.10 (same as the lecture)

Exercise Sessions (tentative schedule)

Section Date Topic
1 Wed, 17.9.2014 Math Refresher
2 Wed, 24.9.2014 Game Theory
3 Wed, 1.10.2014 Game Theory + P2P File Sharing
4 Wed, 8.10.2014 Auction Theory
5 Wed, 15.10.2014 Mechanism Design
6 Wed, 22.10.2014 Online Advertising Auctions
7 Wed, 29.10.2014 Linear Programming
8 Wed, 5.11.2014 Integer Programming
9 Wed, 12.11.2014 Combinatorial Auctions
10 Wed, 19.11.2014 Matching Markets
11 Wed, 26.11.2014 Computational Social Choice
12 Wed, 3.12.2014 Crowdsourcing Markets
13 Wed, 10.12.2014 Review/Practice Exam

Homework Assignments (tentative schedule)

Number Out Date Due Date Topic Download
01 Tue, 23.9.2014 Tue, 7.10.2014, 12:15 Game Theory (Theory)
02 Tue, 7.10.2014 Tue, 14.10.2014, 12:15 Auction Theory (Theory)
03 Tue, 14.10.2014 Tue, 21.10.2014, 12:15 Mechanism Design (Theory)
04 Tue, 21.10.2014 Tue, 28.10.2014, 12:15 Advertising Auctions (Programming)
05(a) Tue, 28.10.2014 Tue, 4.11.2014, 12:15 Linear Programming (Programming) (40%)
05(b) Tue, 4.11.2014 Tue, 11.11.2014, 12:15 Integer Programming (Programming) (60%)
06 Tue, 11.11.2014 Tue, 18.11.2014, 12:15 Combinatorial Auctions (Theory/Programming)
07(a) Tue, 18.11.2014 Tue, 25.11.2014, 12:15 Matching (Theory) [50%]
07(b) Tue, 25.11.2014 Tue, 2.12.2014, 12:15 Social Choice (Theory/Programming) [50%]

Teaching Format and Setup

  1. This course will be structured differently from most courses at IfI: For each lecture, there will be lecture notes (approx. 15-20 pages per lecture) that students must read before class to learn the new material at their own pace. We will use the collaborative PDF annotation tool NB (nb.mit.edu) such that students can ask questions online while reading the lectures notes. Good contributions on NB will positivel influence the participation grade.
  2. Students must answer 4-5 short comprehension questions before every class to show they have completed the readings.
  3. During class, we will not go over all of the material from the lecture notes. Instead, lectures will be interactive, illustrating the concepts from the lecture notes, and students are expected to participate during class discussions.
  4. Every week, there will be a section (exercise session) to practice the concepts learned in the lecture. Participation in the exercise sessions will be very helpful to deepen the understanding of the material and to prepare for solving the homework exercises. However, attendance during the exercise sessions in not mandatory and will not be graded.
  5. There will be approximately 3-4 theoretical/mathematical homework exercises to deepen the understanding of the theoretical content of the course.
  6. There will be approximately 3-4 programming exercises where students need to apply the concepts learned in class.


No special prior knowledge is required. Students need to be proficient in math to solve the theoretical homework exercises, and they need to be able to program to solve the practical homework exercises. Taking the course Math-III before or while taking this course is recommended for BSc students, but not required. Furthermore, any background in microeconomics or game theory is helpful but not required.

Target Audience

Recommended for all BSc and MSc students with an interest in topics at the intersection of economics and computer science.

Teaching/Learning Goals

  1. Understand the importance of economic thinking in computational domains, and of computational thinking in economic domains.
  2. Be able to develop applicable models of complex Internet systems.
  3. Be able to analyze the behavior of systems that include people, computational agents as well as firms, and involve strategic behavior.
  4. Be able to solve both mathematical and conceptual problems involving such systems.
  5. Be able to write programs that implement strategic agents and mechanisms.

Examination + Grading

  1. Written final exam: 50%
  2. Homework exercises 35%
  3. Class participation (or alternatively response essays) + NB comments: 10%
  4. Comprehension questions: 5%

The grade for "participation" will be based on the student's participation during the lecture and the student's contributions to NB. If a student misses a lecture but still wants a good participation grade, then he/she can also write a 1/2 page response essay (per lecture missed) which will then be graded instead of the class participation. Participation during the exercise sessions is optional and will not be graded. The comprehension questions will be graded on a pass/fail basis (i.e, 1 or 0).