Stanford University


Clock Auctions and Radio Spectrum Reallocation

Paul Milgrom
Ilya Segal

Journal of Political Economy
Volume 128, Number 1
January 2020

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.

Stanford University