Algorithm Economics

This course develops a framework to analyze the algorithmic-service industry organization and regulation by an interdisciplinary perspective of economics and computer sciences. Algorithm design has deeply involved into the operation of the platform economy, the dispatch economy, and the sharing-and-renting economy. The algorithm designs shape the market equilibriums, decide the welfare-distribution, and affect the environments and global climate change, Symmetrically, the future human society also eagerly expects the research about how government can develop “smart regulations” for the algorithm economy. All these topics are the frontier of the interdisciplinary research of economics and computer science. Thus, this course will include two sections. The first section discusses the algorithm design in the modern economy, such as the algorithm designs and associated economics theories for the platform economy, dispatch economy, and sharing-and-renting economy. In particular, we will introduce the dispatch algorithm designs of the electricity economy; the bidding and matching algorithm of the sharing-and-renting economy. The second section focuses on the economic impacts of the algorithm design, including the influence of the algorithm design on the market equilibrium, algorithm design and market failure, algorithm design and welfare distribution. In particular, we will discuss the environmental and economic impacts of the dispatch-algorithm design and prediction-algorithm development in an electricity market. The model of private-information market. Price discrimination and bidding algorithm of the sharing-and-renting economy. The course will embed the algorithm models into the economics framework. The knowledge teaching will be coupled and demonstrated by the literature reading and reviewing.