Auction software: a general overview

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Auction formats

The PolicyTracker auction software allows you to create:

  • Simultaneous Multiple Round Auctions (SMRAs),
  • Ascending Clock Auctions (ACAs) and

What are the differences between them?

SMRA

The distinguishing feature of the SMRA is that it is selling the actual licence the bidder will receive. e.g. if you are selling 4 x 10 MHz paired at 800 MHz you would sell these as four individual licences to operate in specific frequency ranges:

  • 800 A (791-796 MHz and 832-837 MHz)
  • 800 B (796-801 MHz and 837-842 MHz)
  • 800 C (801-806 MHz and 842-847 MHz)
  • 800 D (806-811 MHz and 847-852 MHz)

ACA

The SMRA contrasts with the ACA where you would sell generic 800 MHz licences. In an ACA bidders would indicate how many licences want, and then the regulator would assign the actual frequency ranges listed above to the winners. You can also include an Assignment Round where bidders can indicate if they would pay an additional amount to choose a specific frequency range. An advantage of the ACA is that you are bidding for packages. If you need an 800 and a 2.6 licence you will either get both of these or none at all. In an SMRA there is a danger of being left “stranded” on just the 800 or the 2.6.

ACAs and SMRAs are both first price auctions: bidders pay exactly what they offered in the last round of the auction. (ACAs can have a more complex pricing rule if they go to exit bids, but more about this later!)

CCA

The CCA is based on the ACA but includes a Supplementary Round between the Clock Round and the Assignment Round. In the Supplementary Round participants can enter higher bids for their existing packages, or enter new bids for new packages or individual items.

The CCA is a second price auction: winners pay, not their bid, but the next lowest price. A computer program analyses all the bids entered in the Clock Round and the Supplementary Rounds to find the maximum revenue for the auctioneer.

Types of users

The software allows for the creation of two type of users:

  • Bidders
  • Administrators

Administrators can set up actions but bidders can only take part in the auctions. New users can be created in the admin panel.