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An Efficient Ascending-Bid Auction for Multiple Objects

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Author Info
Lawrence M. Ausubel
Abstract

When bidders exhibit multi-unit demands, standard auction methods generally yield inefficient outcomes. This article proposes a new ascending-bid auction for homogeneous goods, such as Treasury bills or telecommunications spectrum. The auctioneer announces a price and bidders respond with quantities. Items are awarded at the current price whenever they are "clinched," and the price is incremented until the market clears. With private values, this (dynamic) auction yields the same outcome as the (sealed-bid) Vickrey auction, but has advantages of simplicity and privacy preservation. With interdependent values, this auction may retain efficiency, whereas the Vickrey auction suffers from a generalized Winner's Curse.

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File URL: http://hdl.handle.net/10.1257/0002828043052330
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File URL: http://www.aeaweb.org/articles/article_detail.php?journal=AER&volume=94&issue=5&article=9&issue_date=December2004
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 94 (2004)
Issue (Month): 5 (December)
Pages: 1452-1475
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Handle: RePEc:aea:aecrev:v:94:y:2004:i:5:p:1452-1475

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  1. Michael Peters & Sergei Severinov, 2008. "An ascending double auction," Economic Theory, Springer, vol. 37(2), pages 281-306, November. [Downloadable!] (restricted)
    Other versions:
  2. Dan Levin, 2005. "Demand Reduction in Multi-Unit Auctions: Evidence from a Sportscard Field Experiment: Comment," American Economic Review, American Economic Association, vol. 95(1), pages 467-471, March. [Downloadable!]
  3. Debasis Mishra & David C. Parkes, 2007. "Multi-item Vickrey-Dutch auctions," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 07-04, Indian Statistical Institute, New Delhi, India. [Downloadable!]
  4. Mathias Drehmann & Kleopatra Nikolaou, 2009. "Funding Liquidity Risk: Definition and Measurement," Working Paper Series 1024, European Central Bank. [Downloadable!]
  5. Juan-Pablo Montero, 2006. "A simple auction mechanism for the optimal allocation of the commons," Working Papers 0608, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research. [Downloadable!]
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  6. Rafael Romeu & Lawrence Ausubel, 2005. "Bidder Participation and Information in Currency Auctions," IMF Working Papers 05/157, International Monetary Fund. [Downloadable!]
  7. Gabrielle Demange, 2006. "The strategy structure of some coalition formation games," PSE Working Papers 2006-38, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  8. Hakan Inal, 2008. "An Efficient Auction for Heterogeneous Discrete Goods When Preferences are Separable," EERI Research Paper Series EERI_RP_2008_04, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  9. Said, Maher, 2009. "Auctions with Dynamic Populations: Efficiency and Revenue Maximization," MPRA Paper 11456, University Library of Munich, Germany, revised 20 Aug 2009. [Downloadable!]
  10. MISHRA, Debasis & PARKES, David C., 2005. "Ascending price Vickrey auctions for general valuations," CORE Discussion Papers 2005052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  11. Christine Zulehner, 2007. "Bidding behavior in sequential cattle auctions," Vienna Economics Papers 0705, University of Vienna, Department of Economics. [Downloadable!]
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  12. John Kagel & Svetlana Pevnitskaya & Lixin Ye, 2007. "Survival auctions," Economic Theory, Springer, vol. 33(1), pages 103-119, October. [Downloadable!] (restricted)
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  13. Dirk Engelmann & Veronika Grimm, 2006. "Bidding Behavior in Multi-Unit Auctions - An Experimental Investigation," Working Paper Series in Economics 24, University of Cologne, Department of Economics. [Downloadable!]
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  14. Jesse A. Schwartz & Quan Wen, 2007. "A Subsidized Vickrey Auction for Cost Sharing," Working Papers 0705, Department of Economics, Vanderbilt University. [Downloadable!]
  15. Maarten C.W. Janssen & Vladimir A. Karamychev, 2007. "Do Auctions select Efficient Firms?," Tinbergen Institute Discussion Papers 07-001/1, Tinbergen Institute. [Downloadable!]
  16. Lawrence M. Ausubel, 2006. "An Efficient Dynamic Auction for Heterogeneous," American Economic Review, American Economic Association, vol. 96(3), pages 602-629, June. [Downloadable!]
  17. David Cooper, 2007. "An introduction to the symposium on behavioral game theory," Economic Theory, Springer, vol. 33(1), pages 1-10, October. [Downloadable!] (restricted)
  18. Emiel Maasland & Sander Onderstal, 2006. "Going, Going, Gone! A Swift Tour of Auction Theory and its Applications," De Economist, Springer, vol. 154(2), pages 197-249, June. [Downloadable!] (restricted)
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  19. Lawrence M. Ausubel & Peter Cramton, 2008. "A Troubled Asset Reverse Auction," Papers of Peter Cramton 08tara, University of Maryland, Department of Economics - Peter Cramton, revised 2008. [Downloadable!]
  20. Alexey Malakhov & Rakesh Vohra, 2009. "An optimal auction for capacity constrained bidders: a network perspective," Economic Theory, Springer, vol. 39(1), pages 113-128, April. [Downloadable!] (restricted)
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