On the Clock of the Combinatorial Clock Auction

50 Pages Posted: 6 Jul 2017

See all articles by Maarten Janssen

Maarten Janssen

University of Vienna - Faculty of Business, Economics, and Statistics

Bernhard Kasberger

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Date Written: June 18, 2016

Abstract

The Combinatorial Clock Auction (CCA) has been frequently used in recent spectrum auctions. It combines a dynamic clock phase with subsequent VCG pricing in order to maximize price discovery and efficiency. We inquire into the role of the clock when bidders have lexicographic preferences for raising rivals' costs. All equilibria of the CCA are inefficient if there is substantial room for price discovery, that is, if there is large uncertainty concerning the competitor's type. Conversely, in all efficient equilibria price discovery is limited. Qualitative features of our equilibria are in line with evidence concerning bidding behavior in some recent CCAs.

Suggested Citation

Janssen, Maarten C. W. and Kasberger, Bernhard, On the Clock of the Combinatorial Clock Auction (June 18, 2016). Available at SSRN: https://ssrn.com/abstract=2996436 or http://dx.doi.org/10.2139/ssrn.2996436

Maarten C. W. Janssen

University of Vienna - Faculty of Business, Economics, and Statistics ( email )

Vienna, A-1210
Austria

Bernhard Kasberger (Contact Author)

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

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