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On the Clock of the Combinatorial Clock Auction

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Abstract

The Combinatorial Clock Auction (CCA) has been frequently used in recent spectrum auctions. It combines a dynamic clockphase with subsequent VCG pricing in order to maximize price discovery and eciency. We inquire into the role of the clock when bidders have lexicographic preferences for raising rivals' costs. All equilibria of the CCA are inecient if there is substantial room for price discovery, that is, if there is large uncertainty concerning the competitor's type. Conversely, in all ecient equilibria price discovery is limited. Qualitative features of our equilibria are in line with evidence concerning bidding behavior in some recent CCAs.

Suggested Citation

  • Maarten Janssen & Bernhard Kasberger, 2016. "On the Clock of the Combinatorial Clock Auction," Vienna Economics Papers 1607, University of Vienna, Department of Economics.
  • Handle: RePEc:vie:viennp:1607
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    File URL: http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1607.pdf
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    References listed on IDEAS

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    1. 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.
    2. Peter Cramton & Yoav Shoham & Richard Steinberg (ed.), 2006. "Combinatorial Auctions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033429, March.
    3. Maarten Janssen & Vladimir Karamychev, 2013. "Gaming in Combinatorial Clock Auctions," Tinbergen Institute Discussion Papers 13-027/VII, Tinbergen Institute, revised 16 Dec 2013.
    4. Goeree, Jacob K. & Lien, Yuanchuan, 2014. "An equilibrium analysis of the simultaneous ascending auction," Journal of Economic Theory, Elsevier, vol. 153(C), pages 506-533.
    5. Martin Bichler & Pasha Shabalin & J├╝rgen Wolf, 2013. "Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 511-545, December.
    6. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, Fall.
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    Cited by:

    1. Jonathan Levin & Andrzej Skrzypacz, 2016. "Properties of the Combinatorial Clock Auction," American Economic Review, American Economic Association, vol. 106(9), pages 2528-2551, September.

    More about this item

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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