The pay-as-bid and the uniform-price auction formats are used to allocate trillions of dollars of goods annually. However, which of these formats yields better outcomes is an open question. This column discusses recent advances in the understanding of these auctions in the context of an ongoing debate regarding the optimal auction format.
Kyle Woodward, 07 January 2015
Nicola Lacetera, Devin Pope, Justin Sydnor, 20 May 2011
People like to take shortcuts and this affects how we make decisions. Looking at auctions of more than 22 million used cars in the US, this column finds that buyers will often only pay attention to the first few digits of mileage. So if you have driven your car 30,000 miles, you might have to sell it for $200 less than if you had driven in 29,999 miles.
Paul Klemperer, 25 September 2009
The crisis set policymakers scrambling for appropriate mechanisms to respond to financial turmoil. This column proposes a new auction design that can be used for toxic asset purchases and central bank liquidity auctions in a credit crunch.
Paul Milgrom, 05 December 2008
Paul Milgrom of Stanford University talks to Romesh Vaitilingam about the application of auction theory, focusing particularly on the world’s most frequently used auction – the sponsored-search auction employed by many internet search engines. The interview was recorded at the annual congress of the European Economic Association in Budapest in August 2007.
Lans Bovenberg, Herman Vollebergh, 17 September 2008
The EU plans to auction permits for the next phase of emissions trading, rather than giving them away for free as in the past. This column explains why the new scheme is a significantly better policy and proposes compensation measures to redress the complaints of industries opposed to the new climate change policy. Harmonised EU action may be required.
Nauro F. Campos, 03 May 2008
Art auctions are a testing ground for economic theory. This column summarises recent research that uses extensive data on works of Latin American art to study auction outcomes. Most puzzlingly, there is a persistent “afternoon effect,” in which identical goods auctioned later command lower prices.