BUS448 Auctions, Sales and Procurement (not offered)

Autumn 2021

Topics

Auctions are used to sell a variety of goods ranging from basic commodities such as fish and flowers to houses and antiques. Furthermore, in many industries firms have to place competitive bids in order to win contracts or they select suppliers by arranging tender competitions. This course introduces students to standard auction formats that are commonly used both to sell and procure (buy) goods and services. In particular students will learn about the most common types of auctions. They will analyse bidders' behavior and the auctioneer's revenues in these auctions. Important issues that might prevent an auction or procurement from running efficiently (collusion, non-contractible dimensions etc.) will be discussed and possible remedies for these issues.
Learning outcome
Knowledge: Upon completion students:
- understand when and why auctions are beneficial
- understand the basic mechanism and incentives at play in an auction
- understand why auction design is crucial and that there is no "one size fits all" in auction theory
Skills: Upon completion students:
- are able to characterize the basic mechanism and incentives at play in an auction
- are able to identify potential issues that might prevent an auction from performing as planned
- are able to suggest ways of minimizing the risk related to issues such as the winner's curse, collusion and non-contractible dimensions.
Teaching

Standard lectures
Recommended prerequisites

Basic game theory and mathematics in the branch of calculus.
Assessment

Individual written assignment accounting 30% for the final grade and a 3-hour written school exam accounting for 70% of the final grade.
Grading Scale

Grading scale: A - F.
Literature

Paul Klemperer. Auctions: Theory and Practice. Princeton University Press Nicola Dimitri, Gustavo Piga and Giancarlo Spagnolo. Handbook of Procurement. Cambridge University Press

Articles and other material announced in class.