Wednesday, June 22, 2016
Jia Yi Jayme Leong (Competition Commission of Singapore) and Hi Lin Tan, Competition Commission of Singapore are DESIGNING AUCTIONS TO PROTECT COMPETITION AND TO PROMOTE EFFICIENCY AND REVENUE.
ABSTRACT: The use of auctions has become increasingly widespread, from the allocation of resources like electricity and spectrum, to the selling of personal items on online websites like eBay. Invitations to tender or to quote are standard procurement methods for government agencies. Against this backdrop, it is important to be aware that the design of auctions and tenders can affect antitrust risks, with further implications on allocative efficiency and revenues. Further, policymakers should keep in mind that an auction may in certain circumstances create a downstream monopoly, potentially resulting in welfare loss and higher prices downstream. This research paper provides an overview of different auction designs, compares their antitrust risks and effectiveness in achieving allocative efficiency and revenue maximization, and discusses some proposals to mitigate antirust risks.