The Product-Mix Auction: A New Auction Design for Differentiated Goods
AbstractI describe a new static (sealed-bid) auction for differentiated goods--the "Product-Mix Auction." Bidders bid on multiple assets simultaneously, and bid-takers choose supply functions across assets. The auction yields greater efficiency, revenue, information, and trade than running multiple separate auctions. It is also often simpler to use and understand, and less vulnerable to collusion, than a simultaneous multiple round auction. I designed it after the 2007 Northern Rock bank run to help the Bank of England fight the credit crunch; in 2008 the U.S. Treasury planned using a related design to buy "toxic assets"; it may be used to purchase electricity. (JEL: D44, E58) (c) 2010 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 8 (2010)
Issue (Month): 2-3 (04-05)
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Web page: http://www.mitpressjournals.org/jeea
Other versions of this item:
- Klemperer, Paul, 2009. "The Product-Mix Auction: a New Auction Design for Differentiated Goods," CEPR Discussion Papers 7395, C.E.P.R. Discussion Papers.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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