Market Design Panel Paul Milgrom Nemmers Prize Conference November - - PowerPoint PPT Presentation

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Market Design Panel Paul Milgrom Nemmers Prize Conference November 6, 2009 1 11/9/2009 Rakeshs Question How, if at all, has theoretical work influenced the design of markets? And if it has not influenced design, why not? Critics

SLIDE 1

Paul Milgrom Nemmers Prize Conference November 6, 2009

11/9/2009 1

Market Design Panel

SLIDE 2

Rakesh’s Question

How, if at all, has theoretical work influenced the design of

markets? And if it has not influenced design, why not?

Critics’ views

Jean-Jacques Laffont Ariel Rubinstein

11/9/2009 2

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How Does Economic Theory Help?

Modigliani-Miller theorems

Advice about dividend policy? About capital structure?

Coase theorem

Advice about make-or-buy decisions?

First welfare theorem

Advice about competition policy?

Revenue equivalence theorem, Vickrey theorem, Gibbard-

Sattherthwaite theorem

Advice about auction designs?

11/9/2009 3

SLIDE 4

Theory and Auction Design

Spectrum auctions: “I can do better than that!”

Avoiding mistakes

UK auction design incorporates

Combinatorial clock stage (Porter-Rassenti-Roopnarine-Smith) Core selecting auction (Day-Milgrom) Revealed preference activity rule (Ausubel-Milgrom) Clock-proxy auction design (Ausubel-Cramton-Milgrom) New computation methods (Day-Raghavan)

11/9/2009 4