Readings in Auction Theory

COS 444, Spring 2009
1. W. Vickrey, "Counterspeculation, auctions, and competitive sealed tenders,"
  Journal of Finance, vol. 16, no. 1, March 1961, pp. 8-37.
  (Basics of auction theory, revenue equivalence, demand reduction.)

2. J. G. Riley and W. F. Samuelson, "Optimal auctions,"
  American Economic Review, vol. 71, no. 3, June 1981, pp. 381-392.
  (Single unit optimal auctions, revenue equivalence.)

3. J. Bulow and J. Roberts, "The simple economics of optimal auctions,"
  J. of Political Economy, vol. 97, no. 5, Oct. 1989, pp. 1060-1090.
  (A graphical interpretation of the Riley and Samuelson result.)

4. J. Morgan, "Efficiency in auctions: Theory and practice," J. of International Money and Finance, vol. 20, 2001, pp. 809-38.
  (A survey of the causes and possible remedies of inefficiencies in multi-unit auctions.)

5. J. Bulow and P. Klemperer, "Auctions versus negotiations,"
  Amer. Econ. Rev., vol. 86, no. 1, March 1996, pp. 180-194.
  (Adding a bidder is better than an optimal auction. Uses technique of Bulow and Roberts in an essential way.)

6. R. B. Myerson and M. A. Satterthwaite, "Efficient Mechanisms for Bilateral Trading,"
  J. Economic Theory, vol. 29, 1983, pp. 265-281.
  (Impossibility of efficient trade in IPV double auction.)

7. J. Bulow and P. Klemperer, "Rational Frenzies and Crashes,"
  J. Political Economy, vol. 102, no. 1, Feb. 1994, pp. 1-23.
  (Shows how Bulow and Roberts techniques can be used to explain seemingly anomalous market behavior.)

8. D. A. Graham and R. C. Marshall, "Collusive bidding behavior at single-object second price and English auctions,"
  J. Political Economy, vol. 95, no. 6, Dec. 1987, pp. 1217-1239.
  (The IPV model is generalized to permit coalitions and cooperative strategies are found to be dominant.)