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July 08, 2008

ICD introductory readings from on high

Students often ask me what they can read to learn about ICD. I've not had a terribly good answer to that. On the one hand, the foundations -- especially mechanism design in economics, and game theory, and engineering design theory, and social psychology -- are ancient (well, a few decades old), and have very rich literatures. But I haven't seen (haven't really searched for) good intros. And, these are the building blocks of ICD, but the particular area in which we focus -- incentive-centered design for information systems -- and the particular multi-disciplinary approach we take -- is rather new. I don't know that folks have written any good overviews yet.

However, three quite nice articles just appeared in the American Economic Review that are a step in the right direction. They are focused on mechanism design and microeconomics (not social psychology, computation theory, nor specifically applications to information system design). But they are accessible, short, and written by giants in the field; in fact, they are revised versions of the Nobel lectures given the by three laureates recently cited for creating the foundations of mechanism design theory: Leonard Hurwicz, Eric Maskin and Roger Myerson.

Maskin's overview, "Mechanism Design: How to Implement Social Goals", doesn't require any math. He introduces implementation theory, "which, given a social goal, characterizes when we can design a mechanism whose predicted outcomes (i.e., the set of equilibrium outcomes) coincide with the desirable outcomes" (p. 567).

Myerson's article, "Perspectives on Mechanism Design in Economic Theory", begins to introduce some of the basic modeling elements from the theory, so it has a bit more math, but it's not heavy going for those who have had an intermediate microeconomics class. He introduces some of the classic applications from economics: bilateral trade with advsere selection (hidden information), and project management with moral hazard (hidden action).

Posted by jmm at July 8, 2008 08:49 AM

Comments

Thanks. Miles and I were talking about this yesterday and what we could suggest for incoming students. I have looked for books.

I think these 2 books combined would at least introduce the subject matter - they are accessible, but do include math:

The Economics of Information Technology: An Introduction (Varian, Farrell, Shapiro)

The Economics of Information: Lying and Cheating in Markets and Organization (Molho)

Posted by: aarnault at July 11, 2008 12:54 PM

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