Lecture: Economics and Computation (Fall 2020)

Lecturer: Sven Seuken, Ludwig Dierks
Teaching Assistants: Behnoosh Zamanlooy, Ermis Soumalias, Paul Friedrich
Teaching Language English
Level BSc, MSc
Academic Semester Fall 2020
Time and Location

Lecture: Wednesday 12:15-13:45 via Zoom

Exercise Session: Thursday 12:15-13:45 via Zoom

Course Material

Moodle (password required)

AP (ECTS): 6 (including a mark)
Office Hours Sven Seuken: email for appointments, BIN-2.B.02

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.

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.
  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.

Prerequisites

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. For BSc students, it is recommended (but not required) that they take the courses "Game Theory", "Foundations of Computing II" and "Introduction to Operations Research: Convex Optimization (Mathematics III)" before taking this course.

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

 
To pass the module, students need to obtain at least 50% of the points from the homework assignments, they need to obtain at least 50% of the points from the comprehension questions, and they need to pass the final exam. For students who pass the module, the final grade will only be determined based on the final exam (scheduled for December 16th, 2020 from 12:00-14:00).

Lectures (tentative schedule)

Lecture Date Topic/Reading Fun & Interesting
1 Wed, 16.9.2020
Introduction to Economics and Computation
Incentives
2 Wed, 23.9.2020 Game Theory (skip sections 2.5 and 2.6) Game Theory,
Primates & Game Theory ,
Badminton & Game Theory (jump to 15:00) (explanation) ,
Repeated Games
3 Wed, 30.09.2020 The Economics of P2P File Sharing Court...
4 Wed, 07.10.2020 Auction Theory and eBay (skip 6.4 and 6.5) eBay
5 Wed, 14.10.2020 Mechanism Design Part 1 (read 7.1 and 7.2, rest optional) Restaurant Pricing
6 Wed, 21.10.2020 Mechanism Design Part 2 (read 7.5 and 7.6, rest optional)  
7 Wed, 28.10.2020 Online Advertising Auctions (skip 10.6) Online Ads
8 Wed, 04.11.2020 Linear Programming (optional: 3.3 + 3.4)  
9 Wed, 11.11.2020 Integer Programming (optional: 12.2, 12.4, 12.7, 12.8)

NP-hard

10 Wed, 18.11.2020 Combinatorial Auctions (optional 11.5 and 11.6)  
11 Wed, 25.11.2020 Matching Markets

(optional 12.4.4 and 12.4.5 and 12.4.6)

Kidney Markets
12 Wed, 02.12.2020 Computational Social Choice Elections
13 Wed, 09.12.2020 Review  
14

Wed, 16.12.2020

at 12:00-14:00

Final Exam (online)  

Exercise Sessions (tentative schedule)

Section Date Topic
1 Thu, 17.09.2020 Math Refresher
2 Thu, 24.09.2020 Game Theory
3 Thu, 01.10.2020 Game Theory + P2P File Sharing
4 Thu, 08.10.2020 Auction Theory
5 Thu, 15.10.2020 Mechanism Design (Part 1)
6 Thu, 22.10.2020 Mechanism Design (Part 2)
7 Thu, 29.10.2020 Online Advertising Auctions
8 Thu, 05.11.2020 Linear Programming
9 Thu, 12.11.2020 Integer Programming
10 Thu, 19.11.2020 Combinatorial Auctions
11 Thu, 26.11.2020 Matching Markets
12 Thu, 03.12.2020 Computational Social Choice
13 Thu, 10.12.2020 Review/Practice Exam

Homework Assignments (tentative schedule)

Number Out Date Due Date Topic
01 Wed, 23.9.2020 Wed, 07.10.2020, 12:15 Game Theory (Theory)
02 Wed, 07.10.2020 Wed, 14.10.2020, 12:15 Auction Theory (Theory)
03 Wed, 14.10.2020 Wed, 28.10.2020, 12:15 Mechanism Design (Theory)
04 Wed, 28.10.2020 Wed, 04.11.2020, 12:15 Advertising Auctions (Programming)
05(a) Wed, 04.11.2020 Wed, 11.11.2020, 12:15 Linear Programming (Programming) [40%]
05(b) Wed, 11.11.2020 Wed, 18.11.2020, 12:15 Integer Programming (Programming) [60%]
06 Wed, 18.11.2020 Wed, 25.11.2020, 12:15 Combinatorial Auctions (Theory/Programming)
07(a) Wed, 25.11.2020 Wed, 02.12.2020, 12:15 Matching (Theory/Programming) [50%]
07(b) Wed, 02.12.2020 Wed, 09.12.2020, 12:15 Social Choice (Theory/Programming) [50%]