IDEAS home Printed from https://ideas.repec.org/p/pcc/pccumd/04mit5.html
   My bibliography  Save this paper

The Clock-Proxy Auction: A Practical Combinatorial Auction Design

Author

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.

Suggested Citation

  • Lawrence M. Ausubel & Peter Cramton & Paul Milgrom, 2004. "The Clock-Proxy Auction: A Practical Combinatorial Auction Design," Papers of Peter Cramton 04mit5, University of Maryland, Department of Economics - Peter Cramton, revised 2004.
  • Handle: RePEc:pcc:pccumd:04mit5
    as

    Download full text from publisher

    File URL: http://www.cramton.umd.edu/papers2000-2004/ausubel-cramton-milgrom-the-clock-proxy-auction.pdf
    File Function: Full text
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
    2. 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.
    3. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1366-1400.
    4. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
    5. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, pages 369-406.
    6. Lawrence M. Ausubel & Peter Cramton & R. Preston McAfee & John McMillan, 1997. "Synergies in Wireless Telephony: Evidence from the Broadband PCS Auctions," Journal of Economics & Management Strategy, Wiley Blackwell, pages 497-527.
    7. Ausubel Lawrence M & Milgrom Paul R, 2002. "Ascending Auctions with Package Bidding," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 1(1), pages 1-44, August.
    8. Lawrence M. Ausubel & Peter Cramton & Wynne P. Jones, 2012. "System and Method for an Auction of Multiple Types of Items," Papers of Peter Cramton 11acjam, University of Maryland, Department of Economics - Peter Cramton, revised 2012.
    9. Cramton, Peter & Kwerel, Evan & Williams, John, 1998. "Efficient Relocation of Spectrum Incumbents," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 647-675, October.
    10. 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.
    11. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, December.
    12. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    13. Peter Cramton, 1997. "The FCC Spectrum Auctions: An Early Assessment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 431-495, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laurent Lamy, 2010. "Core-selecting package auctions: a comment on revenue-monotonicity," International Journal of Game Theory, Springer;Game Theory Society, pages 503-510.
    2. Zimmermann, Klaus F, 1996. "Wage and Mobility Effects of Trade and Migration," CEPR Discussion Papers 1318, C.E.P.R. Discussion Papers.
    3. Robert W. Day & Peter Cramton, 2012. "Quadratic Core-Selecting Payment Rules for Combinatorial Auctions," Operations Research, INFORMS, vol. 60(3), pages 588-603, June.
    4. Alvin E. Roth, 2009. "What Have We Learned from Market Design?," NBER Chapters,in: Innovation Policy and the Economy, Volume 9, pages 79-112 National Bureau of Economic Research, Inc.
    5. John William Hatfield & Paul R. Milgrom, 2005. "Matching with Contracts," American Economic Review, American Economic Association, vol. 95(4), pages 913-935, September.
    6. 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.
    7. Daniele Condorelli, 2007. "Efficient and Equitable Airport Slot Allocation," Rivista di Politica Economica, SIPI Spa, vol. 97(1), pages 81-104, January-F.
    8. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    9. Nicolas Melissas, 2008. "Bidding and Drilling on Offshore Wildcat Tracts," Working Papers 0805, Centro de Investigacion Economica, ITAM.
    10. Paul Milgrom, 2007. "Simplified Mechanisms with Applications to Sponsored Search and Package Auctions," Discussion Papers 07-008, Stanford Institute for Economic Policy Research.
    11. Aytek Erdil & Paul Klemperer, 2010. "A New Payment Rule for Core-Selecting Package Auctions," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 537-547, 04-05.
    12. Peter Cramton & Steven Stoft, 2007. "Colombia Firm Energy Market," Papers of Peter Cramton 07cfem, University of Maryland, Department of Economics - Peter Cramton, revised 2007.
    13. Michael O. Ball & Lawrence M. Ausubel & Frank Berardino & Peter Cramton & George Donohue & Mark Hansen & Karla Hoffman, 2007. "Market-Based Alternatives for Managing Congestion at New York’s LaGuardia Airport," Papers of Peter Cramton 07mbac, University of Maryland, Department of Economics - Peter Cramton, revised 2007.
    14. Peter Cramton, 2009. "Innovation and Market Design," Innovation Policy and the Economy, University of Chicago Press, pages 113-137.
    15. Eiichiro Kazumori, 2010. "Core-Selecting Auctions: An Experimental Study," CARF F-Series CARF-F-226, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

    More about this item

    Keywords

    Auctions; Combinatorial Auctions; Market Design; Clock Auctions;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pcc:pccumd:04mit5. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Cramton). General contact details of provider: http://www.cramton.umd.edu .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.