An Experimental Test of Design Alternatives for Spectrum Auctions with Communication Channels
|Author:||Mgr. Jindřich Matoušek|
|Year:||2014 - summer|
|Leaders:|| PhDr. Lubomír Cingl Ph.D.
|Work type:|| EEI & EP
|Awards and prizes:||M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis.|
|Abstract:||The multi-unit auction mechanisms are one of the most important instruments used for the allocation of spectrum licenses, airport time slots, delivery routes, networking or furniture allocation. This thesis experimentally examines the attributes of complex
multi-unit auction mechanisms (Simultaneous Multi
-Round Auction and its combinatorial extension Simultaneous Multi - Round Package Bidding) in the
presence of an opportunity to collude among the bidding participants due to a provision of a simple communication channel - a chat window. The results suggest that in our parameter setting, the combinatorial bidding format does not bring higher
efficiency. Interestingly, allowing for communication increases efficiency in both examined auction formats. Bidders are able to split the auctioned goods in a collusive agreement, which results in a better allocation compared to the auction formats
without the communication channel. Combinatorial bidding on packages probably makes the decision
-making problem of bidders hard to process and cause
inefficiencies, especially for designs with large number of auctioned goods. When suspicion of potential collusion is present during the preparation phase of the auction, policymakers should favour non -
combinatorial auction formats due to the simplicity
of their bidding languages.