Professor Eric Maskin’s Special Lecture for High School Students SK-Yonsei Economics Chair Professor Eric Maskin gave a special lecture to high school students on November 11. The lecture was organized to motivate the future leaders of Korea. About 500 students from 30 high schools participated in the lecture held in the School of Business building. A Nobel laureate of economics in 2007 and a leading scholar of mechanism design, Professor Maskin’s “Mechanism Design Theory: How to Implement Social Goals” explained the mechanism design theory using simple examples for the students. Professor Maskin started his lecture with a hypothetical case of a mother distributing a cake to her two children, Bob and Alice. To prevent discontent of either side, the mother does not have to cut the cake but make Bob cut the cake into two and have Alice choose one of the two pieces. According to this method, Bob inevitably has to divide the cake as fair as possible, because Alice will take a bigger one if he makes the sizes of pieces unequal. The concept of Vickery Auction was also explained through an example case of selling frequency rate to private corporations by government. Vickery Auction is an auction that uses the price bid by the second highest bidder as the final price. Professor Maskin explained that it is a type of mechanism design that can prevent excessive competition among bidders. Mechanism design seeks to device a pattern that can provide the most unbiased and fair outcome for the interested parties acting for their own profits. Based on these plain illustrations, Professor Maskin observed that mechanism design will play diverse roles in complex and disputed areas such as green house emission and pre-emptive policies for preventing financial crisis.