Auction Design and Applications

The proposed research collaboration concerns the design of implementable optimal auctions. Auctions and broader selling mechanisms are one of the most widely used practical applications of economics, both by the public and private sector: e.g., spectrum license auctions; timber auctions; and online advertising auctions, such as Google or Facebook adverts. Some of these involve multi-billion pound auctions for a single deal. Thus rasing revenue is the seller’s main objective. The celebrated Myerson’s auction mechanism is theoretically optimal in this regard, but is too complicated to be implemented for real-world resource allocation. Motivated by this, this new research collaboration aims to propose a nearly optimal mechanism which is feasible for policymakers and firms to implement in practice. This would significantly reduce the seller’s costs, and given the frequency of auctions and sums of money involved, we expect that this project could have significant impact.