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Practically Implementable Auction for a Good with Countervailing Positive Externalities

Bhirombhakdi, Kornpob and Potipiti, Tanapong (2012): Practically Implementable Auction for a Good with Countervailing Positive Externalities.

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Abstract

This study theoretically presents a new auction design called "take-or-give auction." Unlike in basic auction, the take-or-give auction imposes new rules which the bidders compete for their desired allocation of the object. The auction solves the free-rider problem when applied to an object with countervailing-positive externalities. It is efficient. Moreover, by adding more rules including entry-fee rule, no sale condition and pooling rule, the extended take-or-give auction is the revenue-maximizing auction.

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