This textbook provides a short introduction to auction theory through
exercises with detailed answer keys. Focusing on practical examples,
this textbook offers over 80 exercises that predict bidders' equilibrium
behaviour in different auction formats, along with the seller's
strategic incentives to organize one auction format over the other. The
book emphasizes game-theoretic tools, so students can apply similar
tools to other auction formats. Also included are several exercises
based on published articles, with the model reduced to its main elements
and the question divided into several easy-to-answer parts. Little
mathematical background in algebra and calculus is assumed, and most
algebraic steps and simplifications are provided, making the text ideal
for upper undergraduate and graduate students.
The book begins with a discussion of second-price auctions, which can be
studied without using calculus, and works through progressively more
complicated auction scenarios: first-price auctions, all-pay auctions,
third-price auctions, the Revenue Equivalence principle, common-value
auctions, multi-unit auctions, and procurement auctions. Exercises in
each chapter are ranked according to their difficulty, with a letter
(A-C) next to the exercise title, which allows students to pace their
studies accordingly. The authors also offer a list of suggested
exercises for each chapter, for instructors teaching at varying levels:
undergraduate, Masters, Ph.D.
Providing a practical, customizable approach to auction theory, this
textbook is appropriate for students of economics, finance, and business
administration. This book may also be used for related classes such as
game theory, market design, economics of information, contract theory,
or topics in microeconomics.
