Auction Theory: A Guide to the Literature

TLDR

This paper provides an elementary, non‑technical survey of auction theory, introducing and describing key critical papers. The authors outline core auction concepts, optimal auction theory, revenue equivalence, marginal revenue, and then explore risk‑aversion, affiliation, asymmetries, entry, collusion, multi‑unit and double auctions, royalties, incentive contracts, with appendices providing technical details and examples. The most important papers are reproduced in a companion book, *The Economic Theory of Auctions*, Paul Klemperer (ed.), Edward Elgar (pub.), forthcoming.

Abstract

This paper provides an elementary, non‐technical, survey of auction theory, by introducing and describing some of the critical papers in the subject. (The most important of these are reproduced in a companion book, The Economic Theory of Auctions , Paul Klemperer (ed.), Edward Elgar (pub.), forthcoming. );\); We begin with the most fundamental concepts, and then introduce the basic analysis of optimal auctions, the revenue equivalence theorem, and marginal revenues. Subsequent sections address risk‐aversion, affiliation, asymmetries, entry, collusion, multi‐unit auctions, double auctions, royalties, incentive contracts, and other topics. Appendices contain technical details, some simple worked examples, and a bibliography for each section.