About

Lawrence M. Ausubel is a Professor of Economics at the University of Maryland. He received his PhD in Economics from Stanford University in 1984, along with a Master of Legal Studies from Stanford Law School and an MS in mathematics. Prior to joining the University of Maryland in 1992, he taught in the Department of Managerial Economics and Decision Sciences at Northwestern University for eight years. His main research field is microeconomic theory, with particular emphasis on game theory and the economics of asymmetric information. He has extensively written on topics such as bilateral bargaining, multiple-object auctions, the credit card market, and various aspects of industrial organization and financial markets.

Research topics

• Computer Science
• Microeconomics
• Mathematics
• Economics
• Mathematical economics

Selected publications

• REVEALED PREFERENCE AND ACTIVITY RULES IN DYNAMIC AUCTIONS

  International Economic Review · 2020 · 12 citations

  1st authorCorresponding
  • Computer Science
  • Microeconomics
  • Mathematical economics

  Abstract Activity rules—constraints that limit bidding in future rounds based on past bids—are intended to limit strategic bidding delays in high‐stakes auctions. This article provides a general treatment of activity rules. Traditional point‐based rules are effective for homogeneous goods and reasonably suited for substitute goods. However, they are simultaneously too strong and too weak for general environments; they allow parking, while sometimes preventing straightforward bidding. We prove that the activity rule operationalizing the generalized axiom of revealed preference (GARP) is essentially the unique rule that enforces the Law of Demand while enabling straightforward bidding and never producing “dead ends.”

  PublisherDOI

• Core-selecting auctions with incomplete information

  International Journal of Game Theory · 2019-07-23 · 50 citations

  article1st author
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• An Efficient Ascending-Bid Auction for Multiple Objects: Reply

  American Economic Review · 2018-01-26 · 14 citations

  article1st authorCorresponding

  In a comment, Okamoto (2018 ) identifies and corrects a misspecification of the rationing rule in Ausubel (2004 ). This reply elaborates on the observation that the optimality of truthful bidding in dynamic auctions may be sensitive to the fine details of the rationing rule. It then discusses the wider role of sequential bid processing in restoring truthful bidding. (JEL D44)

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• Auctions (Theory)

  The New Palgrave Dictionary of Economics · 2018-01-01

  book-chapter1st authorCorresponding

  Auction theory has undergone two waves of innovation. The first, which originated with Vickrey (1961) and was completed in the early 1980s, focused on single-item auctions. Results included: guiding principles such as revenue equivalence; the derivation of the optimal auction; and comparisons of first-price, second-price and English auctions. The second, influenced by Treasury and spectrum auctions, emerged in the 1990s and dealt particularly with multi-item auctions. Research has studied: static auctions, including pay-as-bid and uniform-price auctions; dynamic auctions such as simultaneous ascending and clock auctions; combinatorial auctions; and efficient auction design. Much progress has been made, but outstanding problems remain.

  PublisherDOI

• A Practical Guide to the Combinatorial Clock Auction

  The Economic Journal · 2017-10-01 · 53 citations

  article1st authorCorresponding

  The combinatorial clock auction (CCA) is an important recent innovation in auction design that has been utilised for many spectrum auctions worldwide. While the theoretical foundations of the CCA are described in a growing literature, many of the practical implementation choices are neglected. In this article, we examine some of the most critical practical decisions for a regulator implementing the CCA. Topics include: implementation of reserve prices; endogenous band plans; supplementary round activity rules; competition policy; bidding languages; and allocation of the core burden. We illustrate our discussion with examples from recent spectrum auctions that used the CCA format.

  PublisherDOI

• An experiment on auctions with endogenous budget constraints

  Experimental Economics · 2017-03-04 · 11 citations

  article1st authorCorresponding

  Abstract We perform laboratory experiments comparing auctions with endogenous budget constraints. A principal imposes a budget limit on a bidder (an agent) in response to a principal-agent problem. In contrast to the existing literature where budget constraints are exogenous, this theory predicts that tighter constraints will be imposed in first-price auctions than in second-price auctions, tending to offset any advantages attributable to the lower bidding strategy of the first-price auction. Our experimental findings support this theory: principals are found to set significantly lower budgets in first-price auctions. The result holds robustly, whether the principal chooses a budget for human bidders or computerized bidders. We further show that the empirical revenue difference between first- and second-price formats persists with and without budget constraints.

  PublisherDOI

• A Practical Guide to the Combinatorial Clock Auction

  Cambridge University Press eBooks · 2017-10-26 · 13 citations

  book-chapter1st authorCorresponding

  Since its proposal in a 2006 academic paper, the combinatorial clock auction (CCA) has rapidly established itself as one of the leading formats for government auctions of telecommunications spectrum. Its initial implementations were for relatively small auctions and some of these applications may be viewed as experimental. However, in the past few years, usage of the CCA has gained substantial momentum. From 2012 to this writing in 2015, the CCA has been used for more than ten major spectrum auctions worldwide, allocating prime sub-1-GHz spectrum on three continents and raising approximately $20 billion in revenues (see Table 1). Despite the presence of an existing auction format—the simultaneous multiple round auction (SMRA)—which often performs reasonably well, the CCA has the potential of displacing it and becoming the new standard design choice for spectrum auctions.

  PublisherDOI

• The Clock-Proxy Auction: A Practical Combinatorial Auction Design

  Cambridge University Press eBooks · 2017-10-26 · 218 citations

  book-chapterOpen access1st authorCorresponding

  We propose the clock-proxy auction as a practical means for auctioning many related items. A clock auction phase is followed by a last-and-final proxy round. The approach combines the simple and transparent price discovery of the clock auction with the efficiency of the proxy auction. Linear pricing is maintained as long as possible, but then is abandoned in the proxy round to improve efficiency and enhance seller revenues. The approach has many advantages over the simultaneous ascending auction. In particular, the clock-proxy auction has no exposure problem, eliminates incentives for demand reduction, and prevents most collusive bidding strategies. 1

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• Efficient Procurement Auctions with Increasing Returns

  American Economic Journal Microeconomics · 2017-07-27 · 10 citations

  article

  For procuring from sellers with decreasing returns, there are known efficient dynamic auction formats. In this paper, we design an efficient dynamic procurement auction for the case where goods are homogeneous and bidders have increasing returns. Our motivating example is the procurement of vaccines, which often exhibit large fixed costs and small constant marginal costs. The auctioneer names a price and bidders report the interval of quantities that they are willing to sell at that price. The process repeats with successively lower prices, until the efficient outcome is discovered. We demonstrate an equilibrium that is efficient and generates VCG prices. (JEL D24, D44, F53, H57, I11, L14, L65)

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• Market Design and the Evolution of the Combinatorial Clock Auction

  Cambridge University Press eBooks · 2017-10-26 · 23 citations

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Recent grants

• Dynamic Matching Mechanisms

  NSF · $264k · 2005–2009

• Common-Value Auctions with Liquidity Needs

  NSF · $400k · 2009–2013

Frequent coauthors

• Peter Cramton

  65 shared

• Raymond Deneckere

  University of Wisconsin–Madison

  28 shared

• Paul Milgrom

  19 shared

• Nicola Dimitri

  University of Siena

  11 shared

• R. Preston McAfee

  10 shared

• John McMillan

  10 shared

• Jacob K. Goeree

  UNSW Sydney

  9 shared

• Oleg Baranov

  A. N. Nesmeyanov Institute of Organoelement Compounds

  7 shared