The second lecture of IIM-A and SRKKF Annual Lecture Series was successfully held on 24th February, 2018 in IIM campus, Ahmedabad. Shree Ramkrishna Knowledge Foundation (SRKKF) and Indian Institute of Management-A (IIM-A) invited American Economist and Noble Laureate, 2007, Eric S. Maskin to deliver a lecture on ‘Introduction to Mechanism Design Theory’.
Shree Govind Dholakia, Founder, SRKKF and Mr. Errol D’Souza, Director, IIM-A, welcomed the Noble Laureate Eric S. Maskin on behalf of SRKKF and IIM-A. Mr. Maskin spoke for an hour to 200+ audience consisting educators, diplomats, professionals, businessmen and students of IIM-A.
Theory of Mechanism Design can be thought of as the engineering side of economic theory. Much theoretical work focuses on existing economic institutions. On the other hand, Mechanism Design Theory identifies desired outcomes or goals. We then ask whether or not an appropriate institution could be designed to attain that goal,” said Maskin, introducing the basic idea of the theory.
He said that the theory works when the mechanism is incentive compatible. To elaborate on the model way of sharing resources, he gave the example of a mother dividing cake between two children. “If the distribution is not acceptable to either of the child, he/she can be invited to cut equal parts and the other child can be invited to choose the piece. However, complex economies do not work this way. The choice is based on a number of factors with stress on different parameters,” said Maskin.
He went on to give the example of how choices are made when it comes to fields such as energy and allocation of radio frequencies. He elaborated on the factors that play a major role in selection of one category over another by the players involved. Maskin also laid out conditions for rules to work, such as equal opportunity for all to choose freely and uniformity of conditions across the spectrum.
In his concluding remarks, Maskin said that his current research tries to find answers to question related to real-world issues – including greenhouse gas emissions, prevention of financial crises and improving the system by which Americans elect presidents – on the basis of the theory.
Mr. Shreyans Dholakia, Director, SRK Exports, delivered the ‘Vote of Thanks’ to Mr. Eric Maskin for accepting the invitation of SRKKF and sharing his wisdom through Mechanism Design Theory.
SRKKF and IIM-A in their first series of this lecture invited Dr. Prof. Raghuram Rajan, Former Governor, Reserve Bank of India in December 2015 at IIM-A.