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Simultaneous Ascending Auctions with Package Bidding


Author Info

  • Peter Cramton

    (Economics Department, University of Maryland)

  • John McMillan


  • Paul Milgrom


  • Bradley Miller


  • Bridger Mitchell


  • Daniel Vincent


  • Robert Wilson



An effective package bidding mechanism addresses three problems: the exposure problem (the risks a bidder faces in trying to construct an efficiently large combination of licenses), the free-rider problem (the difficulties small bidders have in beating those who bid for larger packages of licenses), and the computational complexity problem (which arises from the fact that the number of possible combinations of licenses is much larger than the number of licenses). Package bidding offers the possibility of an improvement over individual-license bidding only when there are strong complementarities and the pattern of those complementarities varies across bidders. Package bidding works satisfactorily only when the auction rules have been carefully designed to manage all three problems.

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Bibliographic Info

Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 98cra2.

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Length: 34 pages
Date of creation: Mar 1998
Date of revision:
Handle: RePEc:pcc:pccumd:98cra2

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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
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Related research

Keywords: Auctions; Spectrum Auctions; Multiple-Round Auctions; Efficiency;

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Cited by:
  1. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
  2. Cramton, Peter & Schwartz, Jesse A, 2000. "Collusive Bidding: Lessons from the FCC Spectrum Auctions," Journal of Regulatory Economics, Springer, vol. 17(3), pages 229-52, May.
  3. Larson, Nathan & Elmaghraby, Wedad, 2008. "Procurement auctions with avoidable fixed costs: an experimental approach," MPRA Paper 32163, University Library of Munich, Germany, revised 2011.
  4. Benjamin Edelman & Michael Schwarz, 2011. "Pricing and Efficiency in the Market for IP Addresses," Harvard Business School Working Papers 12-020, Harvard Business School, revised Apr 2014.
  5. Heide Coenen & Manfred J. Holler & Esko Niskanen, 2000. "5th Helsinki Workshop on Standardization and Networks, 13-14 August, 2000," Discussion Papers 243, Government Institute for Economic Research Finland (VATT).


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