Channel Auctions

Management Science, Forthcoming

16 Pages Posted: 31 Aug 2018 Last revised: 27 Aug 2019

See all articles by Eduardo M. Azevedo

Eduardo M. Azevedo

University of Pennsylvania - The Wharton School

David M. Pennock

Microsoft Corporation - Microsoft Research, New York City

Bo Waggoner

Harvard University Department of Computer Science

E. Glen Weyl

Microsoft ; RadicalxChange Foundation

Date Written: August 26, 2019

Abstract

Standard auction formats feature either an upper bound on the equilibrium price that descends over time (as in the Dutch auction) or a lower bound on the equilibrium price that ascends over time (as in the English auction). We show that, in some settings with costly information acquisition, auctions featuring both (viz. a narrowing channel of prices) outperform the standard formats. This Channel auction preserves some of benefi ts of both the English (truthful revelation) and Dutch (security for necessary information acquisition) auctions. Natural applications include housing, online auction sites like eBay, recording transactions on blockchains and spectrum rights.

Keywords: auctions, English, Dutch, information acquisition, exposure problem

JEL Classification: D44, D47, D83, C44

Suggested Citation

Azevedo, Eduardo M. and Pennock, David M. and Waggoner, Bo and Weyl, Eric Glen, Channel Auctions (August 26, 2019). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3241744 or http://dx.doi.org/10.2139/ssrn.3241744

Eduardo M. Azevedo

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

HOME PAGE: http://www.eduardoMazevedo.com

David M. Pennock

Microsoft Corporation - Microsoft Research, New York City ( email )

641 Avenue of Americas
New York, NY 10011
United States

Bo Waggoner

Harvard University Department of Computer Science ( email )

33 Oxford Street
Cambridge, MA 02138
United States

Eric Glen Weyl (Contact Author)

Microsoft ( email )

306 Park Ave
Apt 3
Hoboken, NJ 07030
United States
8579984513 (Phone)

HOME PAGE: http://www.glenweyl.com

RadicalxChange Foundation ( email )

HOME PAGE: http://www.radicalxchange.org

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