Strategic Decisions in Networks, Markets and Politics
In this course, we focus on three topics:
Social Choice Theory. We discuss several problems that arise while creating a voting system. We study real world examples of elections and law-making institutions and critically discuss how they operate. What is a fair voting system? And when (and how) is it possible to lie about your preferences to get a better outcome? We also study methods that compute the power of a voter, i.e., how differs the power of voters in different countries? And lastly, we have a look at the problem of appointing seats to parties after the election is over.
Cooperative Game Theory. Companies can often cooperate in order to increase their aggregated profit. An important question is how this surplus should be shared among the cooperating parties. We study several methods that lead to a possible division of the profit, and discuss the fairness of such methods. Moreover, if companies can vote on their preferred cost-sharing method, interesting situations can occur.
Auctions and Equilibria in Networks . We study auctions in matching markets. How should goods be allocated among bidders so that the social welfare (the aggregated happiness) of the participants is maximized and none of the strategically acting participants has an incentive to manipulate the auction? Moreover, we consider dynamic flows. What happens every morning when people commute to work? They start at a certain time at home and then travel over time through the network. Which other people do they meet? When will they arrive?