Quadratic Core-Selecting Payment Rules for Combinatorial Auctions
Robert W. Day () and
Peter Cramton ()
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Robert W. Day: Operations and Information Management, School of Business, University of Connecticut, Storrs, Connecticut 06269
Operations Research, 2012, vol. 60, issue 3, 588-603
We report on the use of a quadratic programming technique in recent and upcoming spectrum auctions in Europe. Specifically, we compute a unique point in the core that minimizes the sum of squared deviations from a reference point, for example, from the Vickrey-Clarke-Groves payments. Analyzing the Karush-Kuhn-Tucker conditions, we demonstrate that the resulting payments can be decomposed into a series of economically meaningful and equitable penalties. Furthermore, we discuss the benefits of this combinatorial auction, explore the use of alternative reserve pricing approaches in this context, and indicate the results of several hundred computational runs using CATS data.
Keywords: games; group decisions; bidding; auctions (search for similar items in EconPapers)
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Working Paper: Quadratic Core-Selecting Payment Rules for Combinatorial Auctions (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:60:y:2012:i:3:p:588-603
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