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Auctioning off a Non-Rivalrous Good with Interference

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  • Alison Watts

    (Department of Economics (SAFE), Southern Illinois University, Carbondale, IL 62901, USA)

Abstract

Auctions are a prevalent way to exchange goods and are well-studied for the exchange of rivalrous goods, but are less studied for non-rivalrous goods. I examine an auction framework where the good sold can be used simultaneously by multiple bidders if their use does not conflict with others; this simultaneous use directly affects the efficiency of the auction. A timely example includes the auctioning off of a radio spectrum by a licensed primary user to unlicensed secondary users who can use the spectrum simultaneously if they are located far enough apart to not cause interference. I examine a uniform price auction over non-conflicting groups and examine how non-rivalry impacts both efficiency and collusion. Conditions are given under which an auction over groups generates higher social welfare than an individual auction. Additional conditions are given under which collusion in a group auction results in higher prices.

Suggested Citation

  • Alison Watts, 2024. "Auctioning off a Non-Rivalrous Good with Interference," Games, MDPI, vol. 15(4), pages 1-11, July.
  • Handle: RePEc:gam:jgames:v:15:y:2024:i:4:p:26-:d:1432848
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    References listed on IDEAS

    as
    1. Baisa, Brian, 2020. "Efficient multi-unit auctions for normal goods," Theoretical Economics, Econometric Society, vol. 15(1), January.
    2. Alison Watts, 2016. "Two ways to auction off an uncertain good," Journal of Economics, Springer, vol. 119(1), pages 1-15, September.
    3. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    4. Paul Klemperer, 1999. "Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-286, July.
    5. Graham, Daniel A & Marshall, Robert C, 1987. "Collusive Bidder Behavior at Single-Object Second-Price and English Auctions," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1217-1239, December.
    6. Alison Watts, 2018. "Generalized Second Price Auctions over a Network," Games, MDPI, vol. 9(3), pages 1-11, September.
    7. Agranov, Marina & Yariv, Leeat, 2018. "Collusion through communication in auctions," Games and Economic Behavior, Elsevier, vol. 107(C), pages 93-108.
    8. Feldman, Michal & Fu, Hu & Gravin, Nick & Lucier, Brendan, 2020. "Simultaneous auctions without complements are (almost) efficient," Games and Economic Behavior, Elsevier, vol. 123(C), pages 327-341.
    9. Jeroen M. Swinkels & Wolfgang Pesendorfer, 2000. "Efficiency and Information Aggregation in Auctions," American Economic Review, American Economic Association, vol. 90(3), pages 499-525, June.
    10. Klemperer, Paul, 1999. " Auction Theory: A Guide to the Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 227-86, July.
    Full references (including those not matched with items on IDEAS)

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