Lynne Kiesling teaches economics at Northwestern. Her weblog has carried many links on auctions, market design, and energy economics. Worth a read if you’re into any of these areas.
an aside: A couple of weeks ago someone asked me “why do you need mechanism design, if, after all, markets take care of themselves?” A reason why you’d want to ‘design’ a mechanism (such as an auction) is when you want to induce the participants in a market to ‘do the right thing’ — that is reveal their true preferences, which leads to an efficient (in economic terms) outcome. If there’s an efficient market already, you don’t need to ‘design’, but, as in the case of markets with small numbers of competitors (say road building contracts) where there’s the possiblity of collusion among bidders, or bidders may shade their tenders on the high side, then you use sealed bid auctions and reserve prices, which induce the bidders to reveal their actual preferences.
