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I have written an unusual textbook together with four
current and former graduate students: Karen A. Campbell,
Emina Cardamone, Scott Deacle, and Lisa A. Delgado. It is
entitled A Toolbox for Economic
Design. It was published in March 2009 by
Palgrave-Macmillan; here is the book link from the publisher and here
is the Amazon link. What is unusual about it
is the co-authorship with graduate students. Indeed,
the book arose from a graduate class project that took
on a life of its own.
The book covers mechanism design, the topic honored by the
2007 economics “Nobel” prize. (What we call the economics
Nobel prize is really named The Sveriges Riksbank Prize
in Economic Sciences in Memory of Alfred Nobel.)
Mechanism design is pervasive in economics, social choice
theory, political science, management, and other
disciplines. It studies how to design rules for an
institution in order to achieve certain given objectives,
while recognizing that the individuals who will be involved
in the running of the institution have their own private
incentives that the institution creates. For example, in
order to achieve the efficient provision of a public good,
it is not enough to ask each citizen how much he or she is
willing to pay for it, as this creates the incentive to
free-ride on the contributions of others. But there are
other ways to go about it, by means of mechanisms that
harness the incentives of even self-interested individuals.
Efficiency can thus be achieved in the provision of public
goods, under certain conditions. The application to public
good provision is one of the many applications of mechanism
design theory.
The book provides a solid coverage of a wide swath of the
mechanism design literature and covers many applications.
It is suitable for advanced undergraduate students of
economics and related subjects, for graduate students of
these subjects, and professionals who would like to read up
on the field.
A page with useful links for those who would like to study
the subject deeper is here, and a page with errata is here. Please email me
using the Contact Me button below if you would like to
send me feedback.