We describe the economics literature on auction markets, with an emphasis on the connection between theory, empirical practice, and public policy, and a discussion of outstanding issues. We describe some basic concepts, to highlight some strengths and weaknesses of the literature, and so...

This paper examines federal auctions for leases on the Outer Continental Shelf in the light of the predictions of the first-price, sealed-bid, common-values model of auctions. The authors find that the data strongly support the model for auctions in which one bidder is better informed than the...

Until the stock market bubble burst in 2000-2002, most CFOs viewed their defined benefit pension plans as profit centers and relatively risk-free sources of income. Since neither pension assets nor liabilities were reported on corporate balance sheets, and expected returns on pension stocks...

This paper provides an explanation for why cartels are not observed frequently in mineral-rights auctions even though it was not illegal for them to form. We use the techniques of mechanism design to characterize the efficient, incentive compatible cartel and show that it can be implemented by a...

This chapter offers a comprehensive survey of the economic analysis of advertising. A first objective is to organize the literature in a manner that clarifies what is known. A second objective is to clarify how this knowledge has been obtained. The chapter begins with a discussion of the key...

Switching costs and network effects bind customers to vendors if products are incompatible, locking customers or even markets in to early choices. Lock-in hinders customers from changing suppliers in response to (predictable or unpredictable) changes in efficiency, and gives vendors lucrative ex...

This chapter surveys the developments in price discrimination theory as it applies to imperfectly competitive markets. Broad themes and conclusions are discussed in the areas of first-, second- and third-degree price discrimination, pricing under demand uncertainty, bundling and behavior-based...