Modern Mechanism Design:

Dynamics and Robustness

May 2010, DIW

Dirk Bergemann
Department of Economics
Yale University

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Topic: This mini-course covers selected topics in auction theory and mechanism design. The aim of this course is to provide the students with the necessary tools to analyze dynamic incentive problems and evaluate the robustness of the mechanisms to private, and importantly to strategic information. The topics below will be addressed in some detail. The lectures will be supported by slides which will be posted prior to the course. The lectures will be based on the papers/publications in the following bibliography.

1. Dynamic Mechanism Design: Efficiency

Bergemann, D., and J. Välimäki (2010): “The Dynamic Pivot Mechanism, ”Econometrica, 78, 771-–790.

Bergemann, D., and M. Said (2010): “Dynamic Auctions: A Survey,” Discussion Paper 1757, Cowles Foundation for Research in Economics,Yale University.
Slides for Dynamic Mechanism Design

2. Dynamic Mechanism Design: Revenue Maximization

Baron, D., and D. Besanko (1984): “Regulation and Information in a Continuing Relationship,”Information Economics and Policy, 1, 267-–302.

Battaglini, M. (2005): “Long-Term Contracting with Markovian Consumers,” American Economic Review, 95, 637–-658.

Bergemann, D., and M. Pesendorfer (2007): “Information Structures in Optimal Auctions,”Journal of Economic Theory, 137, 580-–609.

Courty, P., and H. Li (2000): “Sequential Screening,” Review of Economic Studies, 67, 697-–717.

Pavan, A., I. Segal, and J. Toikka (2009): “Dynamic Mechanism Design: Revenue Equivalence, Profi…t Maximization, and Information Disclosure,” Discussion paper, Northwestern University and Stanford University.

3. Robust Mechanism Design

Bergemann, D., and S. Morris (2005): “Robust Mechanism Design,” Econometrica, 73, 1771–-1813.

Bergemann, D., and S. Morris (2009): “Robust Implementation in Direct Mechanisms,” Review of
Economic Studies, 76, 1175-–1206.

Bergemann, D., and J. Valimaki (2006): “Information in Mechanism Design,” in Advances in Economics and Econometrics, ed. by R. Blundell, W. Newey, and T. Persson, pp. 186–221. Cambridge University Press, Cambridge.
Slides for Robust Mechanism Design

4. Robust Predictions in Incomplete Information Games

Bergemann, D., and S. Morris (2008): “The Role of the Common Prior in Robust Implementation,”
Journal of the European Economic Association Papers and Proceedings, 6, 551–-559.

Bergemann, D., and S. Morris (2007): “Belief Free Incomplete Information Games,” Discussion
Paper 1629, Cowles Foundation for Research in Economics, Yale University.
Slides for Robust Predictions