Index

Module 02 · Game TheoryMoves in Time

Three Friends, One Restaurant

Auctions and Mechanism Design
Auctions and Mechanism Design · Open board

The board ends on mechanism design: write the rules so honest play is each person’s best move, and the warning that no rule gets every good property at once. This lesson is the oldest version of that warning, from voting.

Before you start. From Auctions & Mechanism Design you have mechanism design: choose a game’s rules so that people acting in their own interest produce the outcome you want, plus the result that no rule can have every good property at once. Here the rule turns many people’s rankings into one group choice, and the same kind of limit appears.

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Lab

It is worth 70 coins to you. What should you write on the slip?

Open Pay what you bid, drag What you write on the slip across its range, and watch Every bid you could have made.

Open The second-price auction →

Buyers can't tell a good used car from a lemon. How many lemons does it take before good cars stop selling?

Drag Lemons in the lot from 15 to 25, then switch to Owners offer a warranty.

Open The lemon market →

Related paper

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