GAMESADVANCED
Mechanism Design / Auctions
Write rules so truth-telling wins despite hidden actions and hidden information.
How it works
- Players hide effort (moral hazard) or type (adverse selection).
- Design transfers so honesty is each player's best move.
- Second-price auctions: bid truth, pay the runner-up.
Use → Auctions, procurement, public projects.
Watch out → Clever rules that collapse the moment bidders collude.
Try it → Run a second-price auction for lunch picks this Friday.
REDCAPE jobs → Design · Act
Free sources → Coursera M10 (Mechanism Design)
Attach to a lattice — combines with
Different families, shared jobs. Disagreement between them is where insight lives.
LINEAR & NONLINEAR
Concavity & Diminishing Returns
Curved payoffs change optimal bets: diversify when concave, concentrate when convex.
SHARED JOBS: DESIGN · ACT
DECISIONSDecision Trees + Value of Information
Fold back probabilities; pay for information only if it changes the action.
SHARED JOBS: ACT · DESIGN
DIFFUSIONBass Diffusion (S-Curve)
Innovators plus imitators make the S-curve. Spend early on seeds, later on social proof.
SHARED JOB: DESIGN
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