In 2020, the Nobel prize for economics was awarded to Robert Wilson and Paul Milgrom for their contributions to complex auction formats. In this episode of Game Changer, Stephan Knapek, Managing Partner at TWS Partners, talks about frequency auctions as a practical application of such complex auction formats. He explains why the state uses auctions to allocate frequency bands to telecom providers, and how these auctions are structured. He also gives insights to the strategies of the bidders, and shows how some of them exploit flaws and loopholes in the auction ruleset in order to send signals to their competitors. If you want to read more on this topic – and if you are fluent in German – you can check out Stephan’s articles in the German newspaper Handelsblatt, where he commented on the developments of the German 5G frequency auction in 2019: https://www.tws-partners.com/about-us/media/press-news/handelsblatt-5g-auction-in-germany/

Ratings, reviews, stars and points – we all strongly rely on online reviews when we shop online. But can we really trust them? And is there something we can do to make them more reliable? The research of Paolo Turrini, associate professor at the university of Warwick, is focussed on mechanism design of social networks. In this episode, he explains why ratings are so important in online markets, how they are often manipulated, and how clever game theoretic considerations can make them more trustworthy. In the interview, Paolo mentions the spoof restaurant “the shed at Dulwich”, which made to the top of the Trip Advisor list despite being non-existent. You can check out their homepage here: https://www.theshedatdulwich.com/menu You can find more on Paolo’ research on his homepage: https://www.dcs.warwick.ac.uk/~pturrini/

In this episode Christian Paul, principal at TWS Partners, explains why many companies are struggling to reach their targets in reducing carbon gas emissions. He argues that this challenge is fundamentally connected to how companies set their internal targets and how the mechanisms are designed to reach these targets. Here, game theory can create incentive structures to effectively reduce carbon emissions – and more importantly - internally identify opportunities to reduce these emissions at the lowest internal costs. Christian mentions the annual letter from Larry Fink, CEO of the investment company Blackrock (you can find the letter here: https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter). We were talking to Christian last year, so he is referring to Larry Fink’s letter from January 2020

We discuss with researcher Tobias Riehm which economic reasons cause long waiting lists for parents to find daycare centres for their children in Germany. We find that knowledge from game theory can help to develop a significantly smoother allocation which can help all: children, parents and the daycare centres.

We discuss with TWS Partners’ CEO Marcus Schreiber which economic reasons led to the impressively short development time for a vaccine against SARS-CoV-2. Marcus describes that risk mitigation and clever incentive structures set by the governments significantly contributed to this success story. This can be seen as a prime example for market design, a subfield of game theory. For our German listeners: You can read more on this topic in Marc’s column in the Handelsblatt (https://www.handelsblatt.com/meinung/kolumnen/expertenrat/schreiber/expertenrat-marcus-schreiber-gut-dass-staaten-die-impfstoffentwicklung-nicht-allein-dem-markt-ueberlassen/26663870.html)