Advanced Topics in AI

Electronic Market Design

Instructor: Kate Larson

email: klarson@cs.uwaterloo.ca

**Room: DC 3313
Schedule: Monday and Wednesday 1:00-2:20**

## Schedule |
## Papers |

This course covers topics on the design and analysis of electronic market places. This is an exciting new research area which incorporates ideas from economics (in particular game theory and mechanism design), AI, and theoretical computer science. Electronic markets have many interesting applications, from the obvious ones such as automated negotiation for ecommerce, to more non-obvious applications like resource allocation in grid computing settings. In this course we will focus on computational and game-theoretic questions related to electronic markets, and will look at what it means to design electronic markets with good properties.

This course draws on a wide set of
ideas from AI, CS theory and economics. While there are no formal
prerequisites, some of the material is quite formal mathematically and
students must be able to construct and follow formal proofs. A course
in algorithms and computational complexity is highly recommended.
Knowledge of basic probability theory will be useful.**
It is assumed that students will
NOT be familiar with game theory and mechanism design. **

Please send me
email if you have any questions.

- Introduction to game theory and mechanism design
- Winner determination in combinatorial auctions
- Bidding languages
- Approximate single shot auctions
- Iterative auctions
- Preference elicitation and communication complexity
- Mechanisms for selling digital goods
- False-name bids
- Reputation mechanisms
- Computationally limited agents
- Trading agents
- Privacy and auctions

This is primarily a seminar course and we will spend most of the term reading and discussing research papers. However, for the first 1/4 of the term I will lecture on the important background material that is needed to understand the papers we will read. Students will be given several homework assignments during this part of the course. In the second part of the course students will be responsible for presenting papers in class and discussing them. Projects will also be presented in class at the end of the semester.

Paper presentations Assignments Class Participation Term-long Project |
20% 10% 20% 50% |

Class participation is an important component of this course. Before each class, all students must read the paper and submit comments and questions. Things to think about include

- What is the main contribution of the paper?
- Is it important? Why?
- What was the main insight of the paper?
- What assumptions were made?
- What applications might arise from the paper?
- How can the results be extended?
- What was unclear to you?

The goal of the final project is to develop a deep understanding of topic related to electronic market design, and, to the extent possible, to work on an open research problem. Projects can be theoretical or experimental and students are free to pick their own topics for the final project. However, all topics must be approved by the instructor. A list of suggested topics will be made available.

The project will involve several steps

- Project proposal
*October 20* - Project presentation
*December 1 and 6* - Final project report
*December 13*