The Clock-Proxy Auction: A Practical Combinatorial Auction Design

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The Clock-Proxy Auction: A Practical Combinatorial Auction Design

Author Info

Lawrence M. Ausubel () (Economics Department, University of Maryland)
Peter Cramton () (Economics Department, University of Maryland)
Paul Milgrom ()

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Abstract

We propose the clock-proxy auction as a practical means for auctioning many related items. A clock auction phase is followed by a last-and-final proxy round. The approach combines the simple and transparent price discovery of the clock auction with the efficiency of the proxy auction. Linear pricing is maintained as long as possible, but then is abandoned in the proxy round to improve efficiency and enhance seller revenues. The approach has many advantages over the simultaneous ascending auction. In particular, the clock-proxy auction has no exposure problem, eliminates incentives for demand reduction, and prevents most collusive bidding strategies.

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Publisher Info
Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 04mit5.

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Length: 22 pages
Date of creation: 2004
Date of revision: 2004
Publication status: Published in Peter Cramton, Yoav Shoham, and Richard Steinberg, eds., Combinatorial Auctions, Cambridge, MA: MIT Press, chapter 5, 2006.
Handle: RePEc:pcc:pccumd:04mit5

Contact details of provider:
Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu

For technical questions regarding this item, or to correct its listing, contact: (Peter Cramton).

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-05-26 (All new papers)
NEP-COM-2004-05-16 (Industrial Competition)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Peter Cramton, 1997. "The FCC Spectrum Auctions: An Early Assessment," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 6(3), pages 431-495, 09. [Downloadable!] (restricted)
Other versions:
- Peter Cramton, 1997. "The FCC Spectrum Auctions: An Early Assessment," Papers of Peter Cramton 97jemsfcc, University of Maryland, Department of Economics - Peter Cramton, revised 12 Jul 1998. [Downloadable!]
Cramton, Peter & Kwerel, Evan & Williams, John, 1998. "Efficient Relocation of Spectrum Incumbents," Journal of Law & Economics, University of Chicago Press, vol. 41(2), pages 647-75, October.
Other versions:
- Peter Cramton & Evan Kwerel & John Williams, 1998. "Efficient Relocation of Spectrum Incumbents," Papers of Peter Cramton 98jleer, University of Maryland, Department of Economics - Peter Cramton, revised 12 Jul 1998. [Downloadable!]
Lawrence M. Ausubel & Peter Cramton, 2004. "Auctioning Many Divisible Goods," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 480-493, 04/05. [Downloadable!] (restricted)
Other versions:
- Lawrence M. Ausubel & Peter Cramton, 2004. "Auctioning Many Divisible Goods," Papers of Peter Cramton 04jeea, University of Maryland, Department of Economics - Peter Cramton, revised 2004. [Downloadable!]
Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation, Yale University. [Downloadable!]
Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April. [Downloadable!] (restricted)
Other versions:
- Milgrom, Paul, 1998. "Putting auction theory to work : the simultaneous ascending auction," Policy Research Working Paper Series 1986, The World Bank. [Downloadable!]
- Paul Milgrom, . "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Working Papers 98002, Stanford University, Department of Economics. [Downloadable!]
Lawrence Ausubel & Paul Milgrom, 2002. "Ascending Auctions with Package Bidding," Advances in Theoretical Economics, Berkeley Electronic Press, vol. 1(1), pages 1019-1019. [Downloadable!] (restricted)
Other versions:
- Lawrence M. Ausubel & Paul Milgrom, 2002. "Ascending Auctions with Package Bidding," Working Papers 02004, Stanford University, Department of Economics. [Downloadable!]
Lawrence M. Ausubel & Peter Cramton, 1995. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Papers of Peter Cramton 98wpdr, University of Maryland, Department of Economics - Peter Cramton, revised 22 Jul 2002. [Downloadable!]
McAfee, R Preston & McMillan, John, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-75, Winter. [Downloadable!] (restricted)
Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter. [Downloadable!] (restricted)
Other versions:
- Klemperer, Paul, 2000. "What Really Matters in Auction Design," CEPR Discussion Papers 2581, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA. [Downloadable!]

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Ariane Lambert-Mogiliansky & Konstantin Sonin, 2005. "Collusive market-sharing and corruption in procurement," PSE Working Papers 2005-25, PSE (Ecole normale supérieure). [Downloadable!]
Other versions:
- Ariane Lambert-Mogiliansky & Konstantin Sonin, 2006. "Collusive Market Sharing and Corruption in Procurement," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 15(4), pages 883-908, December. [Downloadable!] (restricted)
John William Hatfield & Paul R. Milgrom, 2005. "Matching with Contracts," American Economic Review, American Economic Association, vol. 95(4), pages 913-935, September. [Downloadable!]
Other versions:
- Paul Milgrom, 2003. "Matching with Contracts," Working Papers 03003, Stanford University, Department of Economics. [Downloadable!]
Paul Milgrom, 2007. "Simplified Mechanisms with Applications to Sponsored Search and Package Auctions," Levine's Bibliography 122247000000001454, UCLA Department of Economics. [Downloadable!]

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