Competitive markets can fail in the "natural monopoly" context and/or be ruled out for ethical or political reasons. This problem can be compounded by the destructive imbalance of coalitional power. Modern research in Market Design offers many remedies in the form of simple mechanisms for allocating private resources: auctions as well as moneyless matching markets (widely applied for university admission or public housing ) and a variety of voting rules for collective decision making.

Lectures: 10 x 2-hour lectures

Tutorials: 10 x 1-hour tutorials

On campus

None

None

ILOs 1-4 are assessed in a 75 minute in-course exam (30%) and a 2-hour degree examination (70%) 

Reassessments are normally available for all courses, except those which contribute to the Honours classification. For non-Honours courses, students are offered reassessment in all or any of the components of assessment if the satisfactory (threshold) grade for the overall course is not achieved at the first attempt. This is normally grade D3 for undergraduate students and grade C3 for postgraduate students. Exceptionally it may not be possible to offer reassessment of some coursework items, in which case the mark achieved at the first attempt will be counted towards the final course grade. Any such exceptions for this course are described below. 

The main aims of the course are:

■ To present the formal models of cooperative behavior known as core stability, both from the normative viewpoint of sharing the benefits of cooperation, and the positive analysis of coalition formation.

■ To show the significance of the problem of market failure and demonstrate the need for market design.

■ To introduce students to specific applications of market design in bilateral matching and voting.

By the end of this course students will be able to:

1. Demonstrate understanding of the central concept of core stability for modelling cooperation in microeconomic contexts.

2. Explain and show the necessity of market design in various economic situations; demonstrate familiarity with a variety of specific mechanisms.

3. Apply knowledge and understanding of the concepts and models of cooperation and mechanism design by successful problem solving.

4. Recognise situations where market design approach is appropriate, and build adequate models for such situations, isolate desirable properties of an outcome and propose appropriate mechanisms.

Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.