Forthcoming: On the clock of the combinatorial clock auctions


Maarten Janssen's and VGSE alumnus Bernhard Kasberger's paper is accepted for print.

The research that has lead to this publication was done at VGSE. Bernhard Kasberger wrote his thesis at VGSE on auctions. Bernhard's research was funded by a research grant of the Austrian Nationalbank. His dissertation consists of three independent chapters. This article was his first chapter of the thesis, which is joint work with his supervisor Maarten Janssen.

Bernhard Kasberger has joined the University of Oxford as a Junior Research Fellow at Queen's College in October 2018.


Abstract: The Combinatorial Clock Auction (CCA) has frequently been used in recent spectrum auctions. It combines a dynamic clock phase and a one-off supplementary round. The winning allocation and the corresponding prices are determined by the VCG rules. These rules should encourage truthful bidding, whereas the clock phase is intended to reveal information. We inquire into the role of the clock when bidders have lexicographic preferences for raising rivals’ costs. We show that in an efficient equilibrium the clock cannot fully reveal bidders’ types. In the spirit of the ratchet effect, in the supplementary round competitors will extract surplus from strong bidders whose type is revealed. We also show that if there is substantial room for information revelation, that is, if the uncertainty about the final allocation is large, all equilibria of the CCA are inefficient. Qualitative features of our equilibria are in line with evidence oncerning bidding behavior in some recent CCAs.

Publication: Janssen, M., & Kasberger, B. (accepted for print/forthcoming). On the clock of the combinatorial clock auctionsTheoretical Economics.