Capacity markets are a means to assure resource adequacy. The need for a capacity market stems from several market failures the most prominent of which is the absence of a robust demand-side. Limited demand response makes market clearing problematic in times of scarcity. We present the economic...

Economists and other auction experts agree that using administrative prices from 25 years ago to set Medicare prices is a bad idea, and that a much better approach is to price Medicare supplies in competitive auctions. That is not surprising. What is surprising is the degree of consensus that...

Forecasting electricity demand for future years is an essential step in resource planning. A common approach is for the system operator to predict future demand from the estimates of individual distribution companies. However, the predictions thus obtained may be of poor quality, since the...

Chairwoman Ellmers, Ranking Member Richmond, and members of the House Committee on Small Business, I am honored to appear before you today and have this opportunity to speak to such a critical committee on a matter of great significance to our future: Medicare auction reform. Without the...

We examine the theoretical properties of the auction for Medicare Durable Medical Equipment. Two unusual features of the Medicare auction are 1) bids are non-binding and 2) winners are paid the median winning bid. These two features lead to complete market failure. Lowball bids result in a price...

We are economists, computer scientists and engineers with expertise in the theory and practice of auctions. In September 2010, many of us signed a letter to Congressional leaders pointing out the numerous fatal flaws in the current Medicare competitive bidding program for durable medical...

Controlling Medicare costs is essential to our health care system. Yet as we look to the future, unfunded Medicare expenses are estimated to be about 70 trillion dollars—an unsustainable amount. Effective use of market methods in Medicare is our best hope for controlling these costs while...

The present invention primarily concerns hybrid auctions that may, for example, combine a clock auction with a proxy auction. Hybrid auctions include multi-item auctions that comprise at least two phases of package auctions: an earlier phase in which bidders participate in a clock auction (or...

The best sites for offshore wind farms on the US Outer Continental Shelf are scarce. To make the best use of this scarce resource, it is necessary to implement a fair and efficient mechanism to assign wind rights to companies that are most likely to develop off-shore wind energy projects....

An auction design for Medicare Durable Medical Equipment is presented. The design addresses the flaws in the current program. Bids are binding commitments. Each bid binds the bidder to particular performance obligations depending on the auction outcome. The bids are made credible through a...