General equilibrium methodology applied to the design, implementation and performance evaluation of large, multi-market and multi-unit policy constrained auctions

Charles R. Plott (), Timothy Cason, Benjamin J. Gillen, Hsingyang Lee and Travis Maron
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Charles R. Plott: California Institute of Technology
Benjamin J. Gillen: Claremont McKenna College
Hsingyang Lee: California Institute of Technology
Travis Maron: California Institute of Technology

Economic Theory, 2023, vol. 75, issue 3, No 2, 693 pages

Abstract: Abstract The paper reports on the methodology, experiments, design and outcome of a large auction with multiple, interdependent markets constructed from principles of general equilibrium as opposed to game theoretic auction theory. The auction distributed 18,788 entitlements to operate electronic gaming machines in 176 interconnected markets to 363 potential buyers representing gaming establishments subject to multiple policy constraints on the allocation. The multi-round auction, conducted in one day, produced over $600M in revenue. All policy constraints were satisfied. Revealed dynamics of interim allocations and new statistical tests provide evidence of multiple market convergence hypothesized by classical principles and theories of general equilibrium. Results support the use of computer supported, “tâtonnement–like” market adjustments as a reliable empirical processes and not as purely theoretical constructs.

Keywords: Auction design; Testbed experiments; Stability (search for similar items in EconPapers)
JEL-codes: C60 D44 D47 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00199-022-01431-7

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