Brief history of auction theory

The latest from David Warsh is a nice concise history of auction theory - including anecdotes of ridiculous auction results. The evolution of the science affects many of the public policy issues we discus here: from the privatization of state companies and allotment of cellular spectrums, to energy contracts and a possible rescue of Europe’s teetering carbon market.

For more, see the first chapter of Paul Milgram’s Putting Auction Theory to Work or chapters from Paul Klemper’s Auctions: Theory and Practice. Also see Michael Klein's Designing Auctions for Concessions: Guessing the Right Value to Bid and the Winner's Curse.

Update: National Acadamies note on the bidding game.