The Role of Auctions in Allocating Public Resources
Staff research paper
The Role of Auctions in Allocating Public Resources by Chris Chan, Patrick Laplagne and David Appels, was released on 20 February 2003. The paper provides an economic framework with which to consider the effectiveness and limitations of auction markets in allocating public resources. It links auction outcomes to bidders’ behavioural characteristics and to the lack or imbalance of information available to governments and bidders. The analysis covers the key elements of an auction, including the auction form, the auction environment, the bidding behaviour and the implications for allocative efficiency and revenue. Also see:
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CONTENTS
Preliminaries
Cover, Copyright, Contents, Preface, Overview
1 Introduction
1.1 Auction design matters
1.2 Scope of the paper
1.3 How to read this paper
2 What is an auction?
2.1 Auctions as a market mechanism
2.2 Auctions as a policy tool
3 Basic auction forms
3.1 Bidding as a strategic decision
3.2 Auction environments
3.3 Auction forms
3.4 Revenue equivalence theorem
3.5 Outcome properties
3.6 Auction design for increasing revenue
3.7 Lessons from a formal analysis of auctions
4 Auction design issues
4.1 Bidders’ interdependent valuations
4.2 Bidders’ risk attitudes
4.3 Bidder collusion
4.4 Bidder participation
4.5 Selling multiple items
4.6 Conclusion
5 Auctions of conservation contracts
5.1 The nature of conservation contracts
5.2 The role of auctions in environmental management
5.3 Government auctions of conservation contracts
5.4 The contracting of numerous landholders
5.5 Bidding on price and service quality
5.6 Conclusion
6 Synergies in spectrum auctions - the Australian case
6.1 Spectrum auctions worldwide
6.2 Synergies and licence aggregation
6.3 Spectrum auctions in Australia
6.4 Indirect evidence of synergies
6.5 Econometric estimation of synergies
6.6 Conclusion
A Enhancing market competitiveness
A.1 Adjusting market values for externalities
A.2 Promoting market entry
A.3 Creating competitive markets
B Spectrum auctions
B.1 Multi-item auctions
B.2 Simultaneous ascending auctions in practice
B.3 Experimental evaluation of auction designs
References
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