Mechanism design is to find the optimal rules (mechanism) of a game towards any desired objectives or social outcomes from engineering side. This course is designed to introduce students to the basics of mechanism design and its applications. It aims to provide a general framework for students to study any decision problem that involves strategic interactions of participants. This course consists of two parts. The first part introduces basic concepts and classic literature in mechanism design theory and auction theory, such as incentive compatibility, individual rationality, budget balanced, direct mechanism, revelation principle, mechanism design with or without payment, Bayesian or dominant strategy mechanism, VCG mechanism, Myerson’s revenue maximization mechanism. The second part focuses on the applications in the engineering field; e.g., eBay auction, Internet advertising, Spectrum allocation, Bandwidth sharing.