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p. 1027. Auctionslocked

  • Ken Binmore

Abstract

‘Auctions’ examines the structure of auctions. Mechanism design allows principals to persuade their agents to behave in a certain way through regulations and incentives. Public asset auctions used to be like a beauty contest, which led to lies and inefficiencies. Auctions incentivize truthfulness by forcing bidders to put money on their claims. There are several types of auction, ranging from traditional English and Dutch auctions, where bids are known, to sealed-bid auctions. A number of strategies exist for determining the optimal design for an auction and the value of the item being sold. It is important for principals to tailor each auction design to the situation at hand.

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