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Improvements to auction theory and inventions of new auction formats

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Abstract

The practice of selling valuable items to the highest bidder, or procuring valuable services fromthe lowest bidder, goes as far back in history as we have written records. The Greek historianHerodotus documented auctions in ancient Babylon already 2500 years ago.1In the RomanEmpire, creditors regularly used auctions to sell off assets confiscated from delinquent debtors.In more modern times, Stockholms Auktionsverk, the oldest surviving auction house in the worldwas founded by the Swedish Baron Claes Rålamb in 1674. In addition to confiscated assets,Stockholms Auktionsverk auctioned a wide range of goods on behalf of willing sellers—forexample, Sweden’s late 17thcentury king, Karl XI, offered a batch of hunting weapons for sale.Similar auction houses existed all around Europe. In 1744, Samuel Baker and George Leigh solda set of valuable books for a grand total of £826 at their newly established auction company. ThatLondon-based company was to become Sotheby’s, presently the world’s largest fine-arts auctionhouse.

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  • Committee, Nobel Prize, 2020. "Improvements to auction theory and inventions of new auction formats," Nobel Prize in Economics documents 2020-2, Nobel Prize Committee.
  • Handle: RePEc:ris:nobelp:2020_002
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    1. Péter Biró & Gyula Magyarkuti, 2021. "The Work of Milgrom and Wilson in the Theory and Practical Application of Auctions," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 20(1), pages 127-151.

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    Keywords

    Auctions;

    JEL classification:

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

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