Abstract
In this paper we consider the mechanism design of traffic BOT project auction. We set up the model of traffic BOT project auction where firms bid on capacity and concession term, and bids are evaluated by a scoring rule designed by the auctioneer. We educe the optimal auction mechanism by analyzing the incentive compatibility. In addition, we find that the optimal capacity is chosen independently of the concession term and the firm’s beliefs about the other participants, so we get the optimal score rule. Finally, we implement the optimal outcome by first-score sealed-bid.
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