I have written an unusual textbook together with four former graduate students: Karen A. Campbell, Emina Cardamone, Scott Deacle, and Lisa A. Delgado, now all Ph.D. alumni of Temple University. It is entitled A Toolbox for Economic Design. It was published in March 2009 by Palgrave-Macmillan; 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.

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