Auctions: Theory and Practice

by Paul Klemperer

Overview

Governments use them to sell everything from oilfields to pollution permits, and to privatize companies; consumers rely on them to buy baseball tickets and hotel rooms, and economic theorists employ them to explain booms and busts. Auctions make up many of the world's most important markets; and this book describes how auction theory has also become an invaluable tool for understanding economics.



Auctions: Theory and Practice provides a non-technical introduction to auction theory, and emphasises its practical application. Although there are many extremely successful auction markets, there have also been some notable fiascos, and Klemperer provides many examples. He discusses the successes and failures of the one-hundred-billion dollar "third-generation" mobile-phone license auctions; he, jointly with Ken Binmore, designed the first of these.


Klemperer also demonstrates the surprising power of auction theory to explain seemingly unconnected issues such as the intensity of different forms of industrial competition, the costs of litigation, and even stock trading 'frenzies' and financial crashes.


Engagingly written, the book makes the subject exciting not only to economics students but to anyone interested in auctions and their role in economics.

Product Details

ISBN-13:	9780691119250
Publisher:	Princeton University Press
Publication date:	03/28/2004
Series:	The Toulouse Lectures in Economics
Edition description:	New Edition
Pages:	264
Product dimensions:	6.00(w) x 9.25(h) x (d)

About the Author

Paul Klemperer is the Edgeworth Professor of Economics at Oxford University and a Fellow of the British Academy and of the Econometric Society.

Table of Contents

Governments use them to sell everything from oilfields to pollution permits and to privatize companies, consumers rely on them to buy baseball tickets and hotel rooms, and business theorists employ them to explain economic booms and busts. Auctions make up many of the world's most important markets; and this book describes how they have become an important economic force throughout the world.

Auctions: Theory and Practice begins with a non-technical introduction to auction theory, and emphasizes its practical application. Klemperer discusses the successes and failures of the one-hundred-billion dollar "third-generation" mobile-phone license auctions--he was the principal designer of the first of these, which on its own raised thirty four billion dollars. He demonstrates the unexpected power of auction theory to explain seemingly unconnected activities such as corporate takeovers, the intensity of different forms of industrial competition, and even stock trading "frenzies."

Although there are many extremely successful auction markets, there have also been some notable fiascos, and Klemperer provides many examples. In one, bidders signalled to each other by including lot identification numbers and even phone numbers as the final digits of their bids. In another, the winner bid $7 million but the rules required him to pay only $5,000. In a third, only three bidders turned up for an auction of three licences, so each of them won without even having to bid.

Engagingly written, the book will appeal not only to members of graduate courses in auction theory and design but also to anyone interested in auctions and their role in economics.

What People are Saying About This

Myerson

As a leader in auction-theory research and as a leading practitioner of auction design, Paul Klemperer is the best person to write the definitive book on auctions in theory and practice. This book ties together material on what economists should learn from auction theory, and on what auction theorists should learn from practical experience in auction design.
— Roger B. Myerson, University of Chicago

Robert Wilson

Paul Klemperer is one of the leaders in auction design worldwide. His emphasis in recent years on some of the more practical aspects of the theory—how to attract bidders, how to avoid collusion, how to think about government policy goals in designing public auctions—is particularly innovative. Klemperer's work will be very influential in the coming years.
— Robert Wilson, Stanford University

From the Publisher

"As a leader in auction-theory research and as a leading practitioner of auction design, Paul Klemperer is the best person to write the definitive book on auctions in theory and practice. This book ties together material on what economists should learn from auction theory, and on what auction theorists should learn from practical experience in auction design. "—Roger B. Myerson, University of Chicago

"Paul Klemperer is one of the leaders in auction design worldwide. His emphasis in recent years on some of the more practical aspects of the theory—how to attract bidders, how to avoid collusion, how to think about government policy goals in designing public auctions—is particularly innovative. Klemperer's work will be very influential in the coming years."—Robert Wilson, Stanford University

"Paul Klemperer not only has full command of the theoretical literature, he also has a very broad experience in putting theoretical insights into practical use."—Nils-Henrik von der Fehr, University of Oslo

Nils-Henrik von der Fehr

Paul Klemperer not only has full command of the theoretical literature, he also has a very broad experience in putting theoretical insights into practical use.
— Nils-Henrik von der Fehr, University of Oslo

Editorial Reviews

"As a leader in auction-theory research and as a leading practitioner of auction design, Paul Klemperer is the best person to write the definitive book on auctions in theory and practice. This book ties together material on what economists should learn from auction theory, and on what auction theorists should learn from practical experience in auction design. "—Roger B. Myerson, University of Chicago

"Paul Klemperer not only has full command of the theoretical literature, he also has a very broad experience in putting theoretical insights into practical use."—Nils-Henrik von der Fehr, University of Oslo

"Paul Klemperer is one of the leaders in auction design worldwide. His emphasis in recent years on some of the more practical aspects of the theory—how to attract bidders, how to avoid collusion, how to think about government policy goals in designing public auctions—is particularly innovative. Klemperer's work will be very influential in the coming years."—Robert Wilson, Stanford University

From the Publisher