Publication

The Clock-Proxy Auction: A Practical Combinatorial Auction Design

Lawrence M. Ausubel, Peter Cramton and Paul Milgrom , Combinatorial Auctions , January 2005.
Abstract:

This chapter reports on the clock-proxy auction, a hybrid combinatorial auction design in which the process of auction begins with a clock phase and ends with a proxy round to promote efficiency. This format combines the advantages of both the designs as the efficiency of the proxy auction is complemented with the logical price discovery of the clock auction. A comparison between the clock-proxy auction and the simultaneous ascending auction that establishes the superiority of the former on the efficiency and revenues front is also made. The chapter concludes that this auction format has been used in more than two dozen high-stake auctions across a range of industries in several countries as it has no exposure problem, eliminates incentives for demand reduction, and does not allow the use of collusive bidding strategies.

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