A Comparison of Different Multi-object Auctions

Student: Levkun Aleksandr

Educational Programme: Economics (Bachelor)

Final Grade: 10

Year of Graduation: 2016

In multi-object auctions, a bidder can be guided by desire to substantially raise rivals' costs of obtaining their winning units. In this paper bidding behavior and allocative efficiency are explored under standard and spiteful preferences. Three auction mechanisms are examined: an ascending uniform-price clock auction (clock auction), a combinatorial clock auction (CCA) and Vickrey auction as a theoretical benchmark (VCG). Under standard preferences, the clock auction and CCA (almost always) are inefficient because of demand reduction and demand expansion, respectively. Under spiteful motive, in the clock auction demand reduction aggravates, whereas the allocation becomes more efficient. In VCG-like mechanisms bidders are able to strategically manipulate the price the rival pays for her winning units.

Full text (added May 12, 2016)

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