Clock Auctions and Radio Spectrum Reallocation

Clock Auctions and Radio Spectrum Reallocation

Journal of Political Economy. January
2020, Vol. 128, Issue 1, Pages 1-31

We study the class of multiround, multiproduct clock procurement auctions that reduce offered prices at each round. When prices stop declining, the remaining bidders become the winning sellers. For single-minded bidders, each such auction has five properties not shared by Vickrey auctions: each is obviously strategy-proof and group-strategy-proof, sets prices that are Nash equilibrium winning bids in the related first-price auction, preserves winner privacy about values, and can be extended to satisfy a budget constraint. In simulations of the US incentive auction, a heuristic clock auction from this class achieves quick computations, high efficiency, and low prices.