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What Really Matters in Auction Design

  • Professor Paul Klemperer

    (Nuffield College, University of Oxford)

The most important issues in auction design are the traditional concerns of competition policy-preventing collusive, predatory, and entry deterring behaviour. Ascending and uniform-price auctions are particularly vulnerable to these problems (we discuss radiospectrum and football TV-rights auctions, electricity markets, and takeover battles), and the Anglo-Dutch auction-a hybrid of the sealed-bid and ascending auctions-may often perform better. However, everything depends on the details of the context; the circumstances of the U.K. mobile-phone license auction made an ascending format ideal. Auction design is a matter of "horses for courses", not "one size fits all".

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Paper provided by EconWPA in its series Microeconomics with number 0004008.

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Length: 20 pages
Date of creation: 21 Jul 2000
Date of revision:
Handle: RePEc:wpa:wuwpmi:0004008
Note: Type of Document - Acrobat pdf; prepared on PC; to print on HP; pages: 20; figures: included
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  42. Richard Engelbrecht-Wiggans & Charles M. Kahn, 2005. "Low-Revenue Equilibria in Simultaneous Ascending-Bid Auctions," Management Science, INFORMS, vol. 51(3), pages 508-518, March.
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