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Activity Rules for the Combinatorial Clock Auction

Lawrence M. Ausubel () and Peter Cramton ()
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Lawrence M. Ausubel: Economics Department, University of Maryland, http://www.econ.umd.edu

Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton

Abstract: In the original proposal for the combinatorial clock auction (Ausubel, Cramton and Milgrom, 2006), a revealed-preference approach was taken to limiting bidders’ activity, based on their earlier activity. However, empirical implementations of the CCA to spectrum auctions have tended to place most or all reliance on a monotonicity condition in eligibility points. This paper proposes activity rules which strike a balance between revealed preference and eligibility-point monotonicity. For the clock auction stage, we propose a hybrid revealed-preference/eligibility-point approach, in which the current round’s bid should satisfy a simplified revealed-preference constraint relative to prior rounds’ bids, but with an eligibility-point safe harbor. For the supplementary round, we propose a tightening of Ofcom’s relative cap, in which supplementary bids must satisfy revealed preference relative to the final clock bid, as well as relative to bids in all eligibility-reducing rounds in which the bidder’s eligibility went below the eligibility points associated with the bid in question.

Keywords: Auctions; spectrum auctions; market design; package auction; clock auction; combinatorial auction (search for similar items in EconPapers)
JEL-codes: D44 C78 L96 (search for similar items in EconPapers)
Pages: pages
Date: 2012, Revised 2012
New Economics Papers: this item is included in nep-mic
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Published in Working Paper, University of Maryland, November 2011

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Persistent link: https://EconPapers.repec.org/RePEc:pcc:pccumd:11acar

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