Abstract

William Vickrey's (1961) inquiry into auctions and ``counterspeculation'' marked the first serious attempt by an economist to analyze the details of market rules and to design new rules to achieve superior performance. He demonstrated that a particular pricing rule makes it a dominant strategy for bidders to report their values truthfully, even when they know that their reported values will be used to allocate goods efficiently. Vickreys discovery was largely ignored for a decade, but the floodgates have since opened. Dozens of studies have extended his design to new environments, developed his associated theory of bidding in auctions, and tested its implications using laboratory experiments and field data.

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