Retrieving the seminal work of William Vickrey in the early 1960s, which largely earned him his Nobel Prize in Economics in 1996, great advancements were made during the 1980s and 1990s in our understanding of the properties and functioning of auction mechanisms. Key works by Milgrom, Myerson and Maskin (the last two winners of the Nobel Prize in 2007) helped to establish the theoretical foundations of a theory and economic analysis of auctions, later supplemented by numerous experimental studies.
All this knowledge and subsequent developments were key over the last 15 years in determining the partial use of auction mechanisms across the world in allocating licenses to use radio spectrum.
This presentation will systematically describe the main pillars of auction theory: issues of efficiency and optimality; major mechanisms, their properties and uses; and relevant components for auction design. It will be illustrated with practical examples, especially those used for spectrum allocation. 1
1 The original version of this text, in Portuguese, was written by the speaker and falls under his responsibility.