Learning Path 27
Market Design
The formal half of the category, taught for use. Mechanism design and the revelation principle, what revenue equivalence assumes and what happens when the assumptions break, why VCG is correct and nobody runs it, deferred acceptance, and the microstructure underneath a quoted price — the spread as adverse selection, inventory risk, and the cost of trading size.
- Expert
- ~17h estimated
- 13 modules
- 78 topics
Suggested before this path:
Why this path matters
Someone writes the rules of every market you trade in — the auction, the matching algorithm, the fee schedule, the order book — and those rules decide who wins far more reliably than skill inside them does. This is the seat that writes the rules, and the theorems that tell you which rules cannot be gamed.
What you will understand
- Proving what works — then optimizing it.
- The other side of the table is thinking too.
Modules in this path
Reading Evidence · Quantitative Methods
- Sampling Error and How Wrong a Small Sample Can Be
- Statistical Significance and What a P-value Does not Mean
- Confidence Intervals and the Range You Should Have Quoted
- Base Rates and the Prosecutor's Fallacy in Business Data
- Regression to the Mean and the Illusion of a Turnaround
- Correlation, Confounding, and the Causal Question Underneath
Running Experiments · Quantitative Methods
- Designing an A/B Test That Can Actually Detect the Effect
- Statistical Power and the Minimum Detectable Effect
- The Peeking Problem and Why You Cannot Watch a Test Run
- Multiple Comparisons and the False-discovery Rate
- Holdouts and Geo Experiments When You Cannot Randomize Users
- Switchback Tests and Interference Between Treated Units
Causal Inference Without an Experiment · Quantitative Methods
- Difference-in-differences and the Parallel-trends Assumption
- Instrumental Variables and the Exclusion Restriction
- Regression Discontinuity and the Local Average Treatment Effect
- Synthetic Control and the Constructed Counterfactual
- Propensity-score Matching and the Selection-on-observables Bet
- Uplift Modeling and Heterogeneous Treatment Effects
Deciding Under Uncertainty · Quantitative Methods
- Bayesian Updating and the Posterior You Should Have Carried
- Expected Utility and Why a Risk-neutral Firm Is a Fiction
- The Value of Information and What a Test Is Worth Before You Run It
- Multi-criteria Decision Analysis and Weighting Things That Do not Compare
- Robust Optimization and the Price of the Worst Case
- Stochastic Programming and Decisions You Make in Two Stages
Optimization and Operations Research · Quantitative Methods
- Linear Programming and Reading the Shadow Price
- Integer Programming and Why Scheduling Is Hard
- Network Flow and the Vehicle Routing Problem
- The Newsvendor Problem and the Cost of Ordering Wrong
- Queueing Theory and Why Utilization Above 85 Percent Breaks
- The Theory of Constraints and Managing the Bottleneck
Models That Predict · Quantitative Methods
- Supervised Learning and the Bias-variance Tradeoff
- Overfitting, Cross-validation, and the Honest Holdout
- Forecasting Demand and the Limits of a Time Series
- Multi-armed Bandits and the Explore-exploit Tradeoff
- Reinforcement Learning for Sequential Business Decisions
- Model Risk and When a Model Should not Be Allowed to Decide
Pricing and Revenue Management · Quantitative Methods
- Revenue Management and Where Dynamic Pricing Came From
- Estimating a Demand Curve From Your Own Price History
- Protection Levels and Littlewood's Rule for Perishable Capacity
- Surge and Peak Pricing and the Fairness Constraint
- Bandit-based Price Testing Without Burning the Market
- Personalized Pricing and the Legal and Reputational Limits
Strategic Interaction · Strategic Economics
- Nash Equilibrium and the Best-response Map
- Sequential Games and Backward Induction
- Credible Commitment and the Value of Removing Your Own Options
- Repeated Games and the Folk Theorem
- Entry Deterrence and Strategic Capacity Commitment
- Mixed Strategies and the Value of Being Unpredictable
Information Economics · Strategic Economics
- Adverse Selection and the Market for Lemons
- Moral Hazard and the Incentive-compatibility Constraint
- Signaling and the Separating Equilibrium
- Screening and the Self-selecting Menu of Contracts
- Information Rents and Why the Informed Party Keeps a Share
- The Principal-agent Problem and the Optimal Contract
Mechanism and Auction Design · Strategic Economics
- Mechanism Design and the Revelation Principle
- Auction Formats and the Revenue Equivalence Theorem
- The Winner's Curse in a Common-value Auction
- The Vickrey-Clarke-Groves Mechanism and Why Nobody Runs It
- Strategy-proofness and Marketplace Rules People Cannot Game
- Matching Markets and the Deferred-acceptance Algorithm
Designing a Marketplace · Strategic Economics
- Cross-side Network Effects and Which Side to Subsidize
- The Chicken-and-egg Problem and Cold-start Strategies
- Marketplace Liquidity and the Thickness Problem
- Take-rate Design and Where a Platform Can Safely Tax
- Reputation Systems and the Economics of Trust
- Platform Governance and the Rules a Market Has to Enforce
Market Structure and Power · Strategic Economics
- Market Power and the Lerner Index
- Barriers to Entry and Contestable Markets
- Horizontal Mergers and the HHI Screen
- Vertical Foreclosure and Raising Rivals' Costs
- Antitrust and the Consumer-welfare Standard
- Price Discrimination in Three Degrees
How a Price Is Actually Made · Strategic Economics
- The Limit Order Book and Where a Price Comes From
- The Bid-ask Spread as the Price of Adverse Selection
- Liquidity Provision and a Market Maker's Inventory Risk
- Price Discovery and How Information Gets Into a Price
- Market Impact and the Cost of Trading Size
- Dark Pools, Internalization, and Where Order Flow Goes