Deferred-acceptance auctions and radio spectrum reallocation

Abstract

Deferred-acceptance auctions choose allocations by an iterative process of rejecting the least attractive bid. These auctions have distinctive computational and incentive properties that make them suitable for application in some challenging environments, such as the planned US auction to repurchase television broadcast rights. For any set of values, any deferred acceptance auction with “threshold pricing”is weakly group strategy-proof, can be implemented using a clock auction, and leads to the same outcome as the complete-information Nash equilibrium of the corresponding paid-as-bid auction. A paid-asbid auction with a non-bossy bid-selection rule is dominance solvable if and only if it is a deferred acceptance auction. ∗The authors thank Alexey Kushnir as well as Mohammad Akbarpour, Piotr Dworczak, Tim Roughgarden, Inbal Talgam Cohen, Joshua Thurston-Milgrom, and Alex Wolitzky for their comments and suggestions. †Department of Economics, Stanford University, Stanford, CA 94305. The authors are members of the Auctionomics’team advising the US Federal Communications Commission concerning the design of the US “incentive auction.”This research analyzes some properties of proposals to which the authors have contributed. ‡Segal gratefully acknowledges the support of the Toulouse Network for Information Technology.