Simultaneous Ascending Auctions with Package Bidding
AbstractAn 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 InfoPaper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 98cra2.
Length: 34 pages
Date of creation: Mar 1998
Date of revision:
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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
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Auctions; Spectrum Auctions; Multiple-Round Auctions; Efficiency;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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- Peter Cramton & Jesse Schwartz, 2000.
"Collusive Bidding: Lessons from the FCC Spectrum Auctions,"
Papers of Peter Cramton
00jre, University of Maryland, Department of Economics - Peter Cramton, revised 09 Mar 1999.
- 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.
- 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 Nov 2012.
- Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
- Larson, Nathan & Elmaghraby, Wedad, 2008. "Procurement auctions with avoidable fixed costs: an experimental approach," MPRA Paper 32163, University Library of Munich, Germany, revised 2011.
- 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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