DP2163 Auction Theory: a Guide to the Literature

Author(s): Paul Klemperer
Publication Date: June 1999
Keyword(s): Auction Theory, Auctions, Bidding, Common-Value Auctions, Mechanism Design, Private-Value-Auctions
JEL(s): D44
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2163

This paper provides an elementary, non-technical, survey of auction theory, by introducing and describing some of the critical papers in the subject. The most important of these are reproduced in a companion book, The Economic Theory of Auctions, Paul Klemperer (ed.), Edward Elgar (pub.), forthcoming.) We begin with the most fundamental concepts, and then introduce the basic analysis of optimal auctions, the revenue equivalence theorem, and marginal revenues. Subsequent sections address risk-aversion, affiliation, asymmetries, entry, collusion, multi-unit auctions, double auctions, royalties, incentive contracts, and other topics. Appendices contain technical details, some simple worked examples, and bibliographies.