New course – Auctions: Theory and Practice

This autumn, we’re proud to announce that a new elective course called “Auctions: Theory and Practice” will be offered to students taking the Master’s in Economics at KU. The course is going to be taught by us – two economists from the economics consultancy Copenhagen Economics (CE). We both studied Economics at KU before joining CE where we now have acquired experience working with high-stakes auctions in real life.

Maybe you mostly know auctions from sites like eBay or Lauritz.com, or from foreclosure auctions for property. Or maybe, when you hear the word “auction”, you think of a room full of people taking turns to hold up plastic bid paddles and a guy with a hammer. But it’s not always like that in practice…

Although auctions may seem like a relatively niche field, auction theory actually holds relevance in many contexts.

Firstly, auctions are a lot more common than you might think. Auctions are used to allocate many goods – from spectrum auctions where telecom companies bid for the right to use certain airwaves, to electricity auctions that daily determine the price of the electricity you consume.

But secondly, auctions are important because they provide a very pure representation of markets, where supply meets demand under controlled circumstances. This means that the intuition gained from studying auctions can be readily applied to many other situations.

As the name of the course implies, we are going to balance theory with practice. The course will cover all of the theoretical concepts of relevance, but we think it’s equally important to understand how the theory is actually applied in the real world. From working at CE, we have experience identifying the optimal auction format and auction regulations for sellers as well as thinking up clever bidding strategies for buyers. And we have worked with auctions in a number of different contexts, including auctions for IP addresses to tenders for pharmaceuticals. We will incorporate some of these cases throughout the course to give you a grasp of how the theory translates to real life.

In particular, we are going to focus on how to design auctions subject to certain policy objectives. What if my objective is not just revenue maximization, but well-functioning markets going forward? What if I need to protect smaller bidders? What if I need to avoid bidder collusion? What if bidders need flexibility to express their true demand? These are some of the questions we will tackle together during the course.

If any of this sounds interesting, you can read more at this link: http://kurser.ku.dk/course/a%c3%98ka08229u.

And please don’t hesitate to get in touch with us if you have any questions about the course or just want to know more about what we do:

Holger Vandel Rasmussen, hvr@copenhageneconomics.com, +45 2834 5387
Neil Gallagher, neg@copenhageneconomics.com, +45 6160 6063

Please sign up! Course registration opened May 15, and you now have until June 1 to get your name on the list.

We’re looking forward to getting started, and we hope to see you there,
Holger and Neil