Four Issues in Auctions and Market Design

Market design concerns the creation of transaction rules, effectively an automated intermediary. I extend the work of Vives (1998), finding that, for moderately sized auction markets, coordination is more important than strategic behavior in determining efficiency. Second, with Cournot competition, small firms tend to win auctions for capacity. Third, standard auctions of licenses (right to compete) tend to have inefficient outcomes. Finally, I describe on-going work to design selling mechanisms for the purpose of extracting surplus when there is only one buyer. Prepared for the Latin American Econometric Society Meetings, August 1997.