View Specification DocumentMarket Failures and Mechanism Design ECON4056
- Academic Session: 2026-27
- School: Adam Smith Business School
- Credits: 15
- Level: Level 4 (SCQF level 10)
- Typically Offered: Semester 1
- Available to Visiting Students: Yes
- Collaborative Online International Learning: No
- Curriculum For Life: No
Short Description
Competitive markets can fail in the "natural monopoly" context and/or be ruled out for ethical or political reasons. This problem can be compounded by the destructive imbalance of coalitional power. Modern research in Market Design offers many remedies in the form of simple mechanisms for allocating private resources: auctions as well as moneyless matching markets (widely applied for university admission or public housing ) and a variety of voting rules for collective decision making.
Timetable
Lectures: 10 x 2-hour lectures
Tutorials: 10 x 1-hour tutorials
On campus
Requirements of Entry
University of Glasgow students must have achieved Subject Honours entry requirements as detailed below to enrol on this course. Permission is required for non-Economics students to take this course as an outside option.
A GPA of 12 (average C3) in Economics 2A and 2B with no course grade below D3, attained at the first attempt. A minimum grade of D3 in both ECON1012, Introductory Mathematics for Economists and ECON013, Introductory Statistics for Economists unless exemptions were agreed on the basis of other courses taken in year 1. Refer to course specifications for details. These grades may be achieved at the second attempt.
Excluded Courses
None
Co-requisites
None
Assessment
1. In-course exam: in-person; Individual; 75 minutes; 30%; ILOs 1-4.
2. Degree exam: in-person; Individual; 120 minutes; 70%; ILOs 1-4.
Main Assessment In: December
Course Aims
The main aims of the course are:
■ To present the formal models of cooperative behavior known as core stability, both from the normative viewpoint of sharing the benefits of cooperation, and the positive analysis of coalition formation.
■ To show the significance of the problem of market failure and demonstrate the need for market design.
■ To introduce students to specific applications of market design in bilateral matching and voting.
Intended Learning Outcomes of Course
By the end of this course students will be able to:
1. Demonstrate understanding of the central concept of core stability for modelling cooperation in microeconomic contexts.
2. Explain and show the necessity of market design in various economic situations; demonstrate familiarity with a variety of specific mechanisms.
3. Apply knowledge and understanding of the concepts and models of cooperation and mechanism design by successful problem solving.
4. Recognise situations where market design approach is appropriate, and build adequate models for such situations, isolate desirable properties of an outcome and propose appropriate mechanisms.