Special Issue "Mechanism Design"

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A special issue of Games (ISSN 2073-4336).

Deadline for manuscript submissions: closed (1 March 2013)

Special Issue Editor

Guest Editor
Dr. Paul J. Healy (Website)

Department of Economics, The Ohio State University, Arps Hall, Room 410, 1945 North High Street, Columbus, Ohio 43210-1120, USA
Interests: microeconomic theory; experimental economics; game theory; behavioral mechanism design

Special Issue Information

Dear Colleagues,

In theory, mechanism design is an incredibly promising methodology within economics and game theory. In practice, however, its applicability is limited by our limited understanding of human behavior. Derived solutions to a given mechanism design problem depend crucially on the behavior rule or equilibrium concept assumed by the designer. To move this field toward real-world application, more focus must be placed on this assumption. With this special issue I am seeking papers that improve our understanding of how to design mechanisms for real-world use. This may include experiments on behavior, examples of mechanisms being implemented or tested in the field, novel theoretical work using "non-standard" behavior rules (Level-K, QRE, etc.), or any other papers that push mechanism design theory closer to field applications.

Dr. Paul J. Healy
Guest Editor

Submission

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. Papers will be published continuously (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as communications are invited.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are refereed through a peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Games is an international peer-reviewed Open Access quarterly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 500 CHF (Swiss Francs). English correction and/or formatting fees will be charged in certain cases for those articles accepted for publication that require extensive additional formatting and/or English corrections. For further details see here.

Published Papers (2 papers)

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Research

Open AccessArticle Two Pricing Mechanisms in Sponsored Search Advertising
Games 2013, 4(1), 125-143; doi:10.3390/g4010125
Received: 6 October 2012 / Revised: 29 January 2013 / Accepted: 19 February 2013 / Published: 20 March 2013
Cited by 3 | PDF Full-text (580 KB) | HTML Full-text | XML Full-text
Abstract
Sponsored search advertising has grown rapidly since the last decade and is now a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers’ bidding. This paper studies and compares [...] Read more.
Sponsored search advertising has grown rapidly since the last decade and is now a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers’ bidding. This paper studies and compares two pricing mechanisms: the generalized second-price auction (GSP) where the winner at the last ad position pays the larger value between the highest losing bid and reserve price, and the GSP with a posted reserve price (APR) where the winner at the last position pays the reserve price. We show that if advertisers’ per-click value has an increasing generalized failure rate, the search engine’s revenue rate is quasi-concave and hence there exists an optimal reserve price under both mechanisms. While the number of advertisers and the number of ad positions have no effect on the selection of reserve price in GSP, the optimal reserve price is affected by both factors in APR and it should be set higher than GSP. Full article
(This article belongs to the Special Issue Mechanism Design)
Open AccessArticle An Equilibrium Analysis of Knaster’s Fair Division Procedure
Games 2013, 4(1), 21-37; doi:10.3390/g4010021
Received: 19 October 2012 / Revised: 8 January 2013 / Accepted: 8 January 2013 / Published: 18 January 2013
PDF Full-text (319 KB) | HTML Full-text | XML Full-text
Abstract
In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf. Steinhaus (1948)). This procedure was designed to efficiently and fairly allocate multiple indivisible items when participants report their valuations truthfully. In equilibrium, players do not follow truthful [...] Read more.
In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf. Steinhaus (1948)). This procedure was designed to efficiently and fairly allocate multiple indivisible items when participants report their valuations truthfully. In equilibrium, players do not follow truthful bidding strategies. We find that, ex-post, the equilibrium allocation is still efficient but may not be fair. However, on average, participants receive the same outcome they would have received if everyone had reported truthfully—i.e., the mechanism is ex-ante fair. Full article
(This article belongs to the Special Issue Mechanism Design)

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