Four Issues in Auctions and Market Design

Abstract

Market design concerns the creation of transaction rules, effectively an automated intermediary. I extend the work of Vives (1998), finding that, for moderately sized auction markets, coordination is more important than strategic behavior in determining efficiency. Second, with Cournot competition, small firms tend to win auctions of licences (right to compete) and tend to have inefficient outcomes. Finally, I describe on-going work to design selling mechanisms for the purpose of extracting surplus when there is only one buyer.