Lecture: Algorithmic Game Theory and Mechanism Design (Fall 2021)

Lecturer: Sven Seuken, Vitor Bosshard
Teaching Assistants: Behnoosh Zamanlooy, Ermis Soumalias, Paul Friedrich
Teaching Language English
Level BSc, MSc
Academic Semester Fall 2021
Time and Location

Lecture: Wednesday 12:15-13:45, BIN-2.A.10

Exercise Session: Thursday 10:15-12:00, BIN-2.A.10

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 lecture, we will cover the interplay between economic thinking and computational thinking as it relates to the analysis and design of electronic markets in particular, and socio-economic systems in general. Topics covered include: algorithmic game theory, mechanism design, p2p file-sharing, eBay auctions, advertising auctions, combinatorial auctions, matching markets and voting systems. 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 weekly homework exercises. Roughly 60% of the exercises will be theoretical/mathematical to deepen the understanding of the theoretical content of the course. The other exercises will be 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 students (5th semester) and MSc students (1st semester) 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 22th, 2021 from 12:00-14:00).

Lectures (tentative schedule)

Lecture Date Topic/Reading Fun & Interesting
1 Wed, 22.9.2021
Introduction to Economics and Computation
Incentives
2 Wed, 29.9.2021 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, 06.10.2021 The Economics of P2P File Sharing Court...
4 Wed, 13.10.2021 Auction Theory and eBay (skip 6.4 and 6.5) eBay
5 Wed, 20.10.2021 Mechanism Design Part 1 (read 7.1 and 7.2, rest optional) Restaurant Pricing
6 Wed, 27.10.2021 Mechanism Design Part 2 (read 7.5 and 7.6, rest optional)  
7 Wed, 03.11.2021 Online Advertising Auctions (skip 10.6) Online Ads
8 Wed, 10.11.2021 Linear Programming (optional: 3.3 + 3.4)  
9 Wed, 17.11.2021 Integer Programming (optional: 12.2, 12.4, 12.7, 12.8)

NP-hard

10 Wed, 24.11.2021 Combinatorial Auctions (optional 11.5 and 11.6)  
11 Wed, 01.12.2021 Matching Markets

(optional 12.4.4 and 12.4.5 and 12.4.6)

Kidney Markets
12 Wed, 08.12.2021 Computational Social Choice Elections
13 Wed, 15.12.2021 Review  
14

Wed, 22.12.2021

at 12:00-14:00

Final Exam  

Exercise Sessions (tentative schedule)

Section Date Topic
1 Thu, 23.09.2021 Math Refresher
2 Thu, 30.09.2021 Game Theory
3 Thu, 07.10.2021 Game Theory + P2P File Sharing
4 Thu, 14.10.2021 Auction Theory
5 Thu, 21.10.2021 Mechanism Design (Part 1)
6 Thu, 28.10.2021 Mechanism Design (Part 2)
7 Thu, 04.11.2021 Online Advertising Auctions
8 Thu, 11.11.2021 Linear Programming
9 Thu, 18.11.2021 Integer Programming
10 Thu, 25.11.2021 Combinatorial Auctions
11 Thu, 02.12.2021 Matching Markets
12 Thu, 09.12.2021 Computational Social Choice
13 Thu, 16.12.2021 Review

Homework Assignments (tentative schedule)

Number Out Date Due Date Topic
01 Wed, 29.9.2021 Wed, 13.10.2021, 12:15 Game Theory (Theory)
02 Wed, 13.10.2021 Wed, 20.10.2021, 12:15 Auction Theory (Theory)
03 Wed, 20.10.2021 Wed, 03.11.2021, 12:15 Mechanism Design (Theory)
04 Wed, 03.11.2021 Wed, 10.11.2021, 12:15 Advertising Auctions (Programming)
05(a) Wed, 10.11.2021 Wed, 17.11.2021, 12:15 Linear Programming (Programming) [40%]
05(b) Wed, 17.11.2021 Wed, 24.11.2021, 12:15 Integer Programming (Programming) [60%]
06 Wed, 24.11.2021 Wed, 01.12.2021, 12:15 Combinatorial Auctions (Theory/Programming)
07(a) Wed, 01.12.2021 Wed, 08.12.2021, 12:15 Matching (Theory/Programming) [50%]
07(b) Wed, 08.12.2021 Wed, 15.12.2021, 12:15 Social Choice (Theory/Programming) [50%]