- What are the effects of complexity in mechanism design? Participating in an auction mechanism (or any market institution) requires time and effort on the side of the buyers. That in turn may lead some buyers to bid very conservatively, or not to participate at all, in order to economize on effort. We lack a theory for quantifying the complexity of a mechanism.
- Auction theory and matching theory offer models and algorithms for allocating goods or matching market participants. However, the majority of markets do not use structured mechanisms (such as auctions and matching algorithms). Why are some markets (such the medical residency match) using centralized matching procedure while other markets (such as the purchases of automobiles with various options packages) do not? Answering this question may help to design structured market mechanisms for the markets where chaotic negotiations rule the day.
- Understanding when and how reputations emerge, and how to improve the designs of structured reputation systems. Reputations of individuals and businesses play an important role in economic and personal life. With some exceptions, most notably in electronic commerce, the mechanisms for accumulating reputation are informal rather than structured.
- How should a firm set posted prices for a menu of products? Although economics offers a theoretical framework for how to set prices, most theory assumes omniscience about demand. To build a practical pricing engine, one needs a system that generates exogenous price variation and then uses it to calculate appropriate prices going forward. Yahoo! offers thousands, even millions, of different advertising products, so estimating a demand system suffers from the curse of dimensionality as well as practical constraints (perceived fairness, etc.) in generating price variation. We are looking for better theory and econometrics for the problem of building a pricing engine.
This is part of Yahoo!'s Key Scientific Challenges Program, about which they say
"We invite PhD students working in each of our core research areas to review the challenges listed below and submit an application between January 24th - March 11th, 2011 to be considered for the Key Scientific Challenges Program."
Program Award Benefits
- $5,000 unrestricted research seed funding which can be used for conference fees and travel, lab materials, professional society membership dues, etc.
- Exclusive access to select Yahoo! datasets
- The unique opportunity to collaborate with our industry-leading scientists
- An invitation to this summer's exclusive Key Scientific Challenges Graduate Student Summit where you'll join the top minds in academia and industry to present your work, discuss research trends and jointly develop revolutionary approaches to fundamental problems
HT: Noam Nisan at AGT
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1 comment:
Do banks hire microeconomists to do this type work? If not, should they?
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