Journal of Economic Perspectives: Vol. 16 No. 1 (Winter 2002)
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What Really Matters in Auction Design
Klemperer, Paul. 2002. "What Really Matters in Auction Design." Journal of Economic Perspectives, 16(1): 169-189.
The most important issues in auction design are the traditional concerns of competition policy-preventing collusive, predatory, and entry-deterring behavior. Ascending and uniform-price auctions are particularly vulnerable to these problems. The Anglo-Dutch auction - a hybrid of the sealed-bid and ascending auctions - may perform better. Effective antitrust is also critical. Notable fiascoes in auctioning mobile-phone licenses, television franchises, companies, eletricty, etc., and especially the European "third-generation" (UMTS) spectrum auctions, show that everything depends on the details of the context. Auction design is not "one size fits all."
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Klemperer, Paul (Oxford University, England)
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