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Full-Text Articles in Business
Demand Reduction And Inefficiency In Multi-Unit Auctions, Peter Cramton, Lawrence M. Ausubel
Demand Reduction And Inefficiency In Multi-Unit Auctions, Peter Cramton, Lawrence M. Ausubel
Peter Cramton
Auctions typically involve the sale of many related goods. Treasury, spectrum and electricity auctions are examples. In auctions where bidders pay the market-clearing price for items won, large bidders have an incentive to reduce demand in order to pay less for their winnings. This incentive creates an inefficiency in multiple-item auctions. Large bidders reduce demand for additional items and so sometimes lose to smaller bidders with lower values. We demonstrate this inefficiency in an auction model which allows interdependent values. We also establish that the ranking of the uniform-price and pay-as-bid auctions is ambiguous in both revenue and efficiency terms. …
Affidavit Of Peter Cramton, Peter Cramton
Affidavit Of Peter Cramton, Peter Cramton
Peter Cramton
Comments on proposed changes to how the energy clearing price is calculated. For ISO New England.