By Sydney Collins, '20

Devin Chen, ‘20, came to the University of Richmond expecting to major in mathematics. However, UR’s liberal arts curriculum opened him up to other areas of interest. “During the FYS ‘Education and Citizenship,’ I became really interested in the social sciences; it was more interesting to me than only mathematics. Now, I plan on double majoring in both PPEL and mathematics,” Chen said.

He’s gone on to look for ways his two areas of interest can intersect. 

This past summer, Chen chose to join math professor Michael Kerckhove’s research group and worked on a model known as second-price auction. The fundamental idea behind this principle is that the player with the highest value for an item wins at an auction, but only has to pay the second-highest value in order to attain the item. 

“The good thing about this mechanism is that it compels players to bid truthfully because there are no incentives to bid otherwise; this allows everything else to be much simpler because we can exclude the possibilities of players lying in order to achieve higher profits,” Chen said. 

Through his research, Chen found that if a second-price auction were used in an actual auction, it would achieve the socially optimal outcome. The mechanism best achieves the desired outcome through influencing the players’ interests.

Chen knew that after completing his research, he was going to return to his childhood home in China. However, he wanted to continue his educational experience so he chose to spend the rest of the summer attending the Tsinghua International Summer School, in China, which focused on environmental challenges. “The goal of that summer school was for us to explore China’s current environmental issues and come up with an innovative project that would solve one of the multiple issues they presented,” Chen said.

Chen and his group were faced with the challenge of thinking of a method that could reduce the issue of increasing carbon emission. Upon further reflection and correspondence with Dr. Kerckhove, Chen decided to take his findings from his research on second-price auctions and apply them to a social science concept.

“The government will assess a company’s past carbon emission level and grant a permit value designating the allowable emissions for the following year,” he said. “The companies are free to trade those permits among themselves, in which case the companies then self-identify as either a buyer or seller. Buyers will also need to identify their valuation for more permits. Then we can incorporate the second-price auction model to allocate the permits, resulting in a socially optimal outcome.”

By incorporating this mathematical approach to an environmental dilemma, Chen and his team won first place for their project at the conference.

In utilizing the information he gathered from his summer research, Chen was able to administer his findings in a way that exceeded past the classroom. “It feels good to apply what I have learned and receive an award for that,” he said. “I think this model is really interesting because it can be applied to various scenarios, and if it’s applied maybe it can be better for society.”