Modeling Opportunities in Auctions
Sunday, December 3, 2000 - 11:00am - 12:00pm
Michael Rothkopf (Rutgers, The State University of New Jersey)
This paper argues that the answers to interesting questions about real auctions depend, often critically, on the particular mathematical assumptions that go into a model of an auction situation. It then suggests some understudied areas for fruitful mathematical research on competitive bidding. These include asymmetry, financially constrained bidders, complicated information structures, bidder decisions about auction participation, the effect of repeated auctions involving the same participants, auctioning items with interrelated values, and transaction costs. The paper also discusses two major areas where new, complicated auctions are being designed: combinatorial spectrum auctions and electricity and transmission rights auctions.