If game theory analyzes how players behave in given games, mechanism design asks: what game should we create? It's "reverse game theory" - designing rules and institutions to achieve desired outcomes.

The revelation principle is foundational: any outcome achievable by any mechanism can be achieved by one where players truthfully report their private information. This dramatically simplifies the design problem.

Auction design is the canonical application. How do you sell an item to maximize revenue? How do you allocate spectrum licenses efficiently? Vickrey's second-price auction provides elegant solutions.

In this topic, you'll learn to design incentive structures for organizations, contracts that align interests, and auction formats for different objectives. As Woody Brock applies these tools: how should we structure institutions to achieve fair outcomes? Mechanism design provides rigorous answers.