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An Efficient Ascending-Bid Auction for Multiple Objects

An Efficient Ascending-Bid Auction for Multiple Objects Abstract When bidders exhibit multi-unit demands, standard auction methods generally yield inefficient outcomes. This article proposes a new ascending-bid auction for homogeneous goods, such as Treasury bills or telecommunications spectrum. The auctioneer announces a price and bidders respond with quantities. Items are awarded at the current price whenever they are “clinched,” and the price is incremented until the market clears. With private values, this (dynamic) auction yields the same outcome as the (sealed-bid) Vickrey auction, but has advantages of simplicity and privacy preservation. With interdependent values, this auction may retain efficiency, whereas the Vickrey auction suffers from a generalized Winner's Curse. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

An Efficient Ascending-Bid Auction for Multiple Objects

American Economic Review , Volume 94 (5) – Dec 1, 2004

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References (69)

Publisher
American Economic Association
Copyright
Copyright © 2004 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/0002828043052330
Publisher site
See Article on Publisher Site

Abstract

Abstract When bidders exhibit multi-unit demands, standard auction methods generally yield inefficient outcomes. This article proposes a new ascending-bid auction for homogeneous goods, such as Treasury bills or telecommunications spectrum. The auctioneer announces a price and bidders respond with quantities. Items are awarded at the current price whenever they are “clinched,” and the price is incremented until the market clears. With private values, this (dynamic) auction yields the same outcome as the (sealed-bid) Vickrey auction, but has advantages of simplicity and privacy preservation. With interdependent values, this auction may retain efficiency, whereas the Vickrey auction suffers from a generalized Winner's Curse.

Journal

American Economic ReviewAmerican Economic Association

Published: Dec 1, 2004

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