Peter Cramton is Professor of Economics at the University of Maryland. Since 1983, he has conducted research on auction theory and practice. This research appears in the leading economics journals. The main focus is the design of auctions for many related items. Applications include spectrum auctions, electricity auctions, and treasury auctions. On the practical side, he is Chairman of Market Design Inc., an economics consultancy founded in 1995, focusing on the design of auction markets. Since 2001, he has played a lead role in the design and implementation of electricity auctions in France and Belgium, gas auctions in Germany, and the world’s first auction for greenhouse gas emissions held in the UK in 2002. He has advised numerous governments on market design and has advised dozens of bidders in high-stake auction markets. Since 1997, he has advised ISO New England on electricity market design and was a lead designer of New England’s forward capacity auction. He led the design of electricity and gas markets in Colombia, including the Firm Energy Market, the Forward Energy Market, and the Long-term Gas Market. Since June 2006, he played a leading role in the design and development of Ofcom’s spectrum auctions in the UK. He has advised the UK, the US, and Australia on greenhouse gas auction design. He led the development of the FAA’s airport slot auctions for the New York City airports. He received his B.S. in Engineering from Cornell University and his Ph.D. in Business from Stanford University.
Auctions
Pricing Rule in a Clock Auction (with Pacharasut Sujarittanonta), Decision Analysis (2010)
We analyze a discrete clock auction with lowest-accepted bid (LAB) pricing and provisional winners, as...
Global Carbon Pricing: Essential, Inexpensive, and Feasible (with Steven Stoft), Research Paper, Global Energy Policy Center (2009)
The failure of the international emission-capping agenda need not and should not block the path...
Using Forward Markets to Improve Electricity Market Design (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Forward markets, both medium term and long term, complement the spot market for wholesale electricity....
Virtual Power Plant Auctions (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Since their advent in 2001, virtual power plant (VPP) auctions have been widely implemented. In...
Fear of Losing in Dynamic Auctions: An Experimental Study (with Emel Filiz-Ozbay, Erkut Ozbay, and Pacharasut Sujarittanonta), Working Paper, University of Maryland (2009)
We analyze the implications of different pricing rules in discrete clock auctions. The two most...
Bargaining
ESOP Fables: The Impact of Employee Stock Ownership Plans on Labor Disputes (with Hamid Mehran and Joseph Tracy), Working Paper, University of Maryland (2008)
By the early 1990s employee stock ownership plans (ESOPs) had become as prevalent in unionized...
Unions, Bargaining and Strikes (with Joseph Tracy), International Handbook of Trade Unions (2002)
Labor disputes are an intriguing feature of the landscape of industrialized economies. Economists have had...
Strikes and Holdouts in Wage Bargaining (with Joseph S. Tracy), Game Theory in the Tradition of Bob Wilson (2002)
Bargaining with Incomplete Information (with Lawrence M. Ausubel and Raymond J. Deneckere), Handbook of Game Theory (2001)
A central question in economics is understanding the difficulties that parties have in reaching mutually...
Collusion
Using Forward Markets to Improve Electricity Market Design (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Forward markets, both medium term and long term, complement the spot market for wholesale electricity....
Forward Reliability Markets: Less Risk, Less Market Power, More Efficiency (with Steven Stoft), Utilities Policy (2008)
A forward reliability market is presented. The market coordinates new entry through the forward procurement...
The Effect of Incumbent Bidding in Set-Aside Auctions: An Analysis of Prices in the Closed and Open Segments of FCC Auction 35 (with Allan T. Ingraham and Hal J. Singer), Telecommunications Policy (2008)
This paper examines the impact of an incumbent carrier’s participation in two simultaneously conducted auctions:...
An Overview of Combinatorial Auctions (with Yoav Shoham and Richard Steinberg), ACM SIGecom Exchanges (2007)
The 700 MHz Spectrum Auction: An Opportunity to Protect Competition In a Consolidating Industry (with Andrzej Skrzypacz and Robert Wilson), Report for Frontline Wireless (2007)
This paper is provided in connection with the 2007 Telecommunications Symposium – Voice, Video and...
Corporate Governance
Relational Investing and Agency Theory (with Ian Ayres), Cardozo Law Review (1994)
This Article analyzes how, and when, corporate governance could be improved by utilizing "relational investing."...
Dissolving a Partnership Efficiently (with Robert Gibbons and Paul Klemperer), Econometrica (1987)
Several partners jointly own an asset that may be traded among them. Each partner has...
Electricity and Gas
Using Forward Markets to Improve Electricity Market Design (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Forward markets, both medium term and long term, complement the spot market for wholesale electricity....
Virtual Power Plant Auctions (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Since their advent in 2001, virtual power plant (VPP) auctions have been widely implemented. In...
Prediction Markets to Forecast Electricity Demand (with Luciano I. de Castro), Working Paper, University of Maryland (2009)
Forecasting electricity demand for future years is an essential step in resource planning. A common...
Foreword to Ross Baldick's 'Single Clearing Price in Electricity Markets', Compete Coalition, www.competecoalition.com (2009)
Argues that consumers and suppliers are better off with the clearing-price auction in electricity markets.
Auctioning Long-term Gas Contracts in Colombia, Report for Colombia’s Comisión de Regulación de Energía y Gas (2008)
This paper presents an approach to auctioning long-term gas contracts in Colombia. I propose an...
Environmental Markets
Price Is a Better Climate Commitment (with Steven Stoft), The Economists' Voice (2010)
At the international level, a global carbon price is a better form of commitment to...
Global Carbon Pricing: Essential, Inexpensive, and Feasible (with Steven Stoft), Research Paper, Global Energy Policy Center (2009)
The failure of the international emission-capping agenda need not and should not block the path...
Report on Key Design Elements of Auctions Under Australia's Carbon Pollution Reduction Scheme, Tradeslot Report to Australian Department of Climate Change, [Ch. 9 Auction Design, Australian White Paper] (2008)
Innovation and Market Design, Innovation Policy and the Economy (2008)
Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport...
An Overview of Combinatorial Auctions (with Yoav Shoham and Richard Steinberg), ACM SIGecom Exchanges (2007)
Epidemiology
Nonrandom Mixing Models of HIV Transmission (with Edward H. Kaplan and A. David Paltiel), Mathematical and Statistical Approaches to AIDS Epidemiology (1989)
Models of HIV transmission and the AIDS epidemic generally assume random mixing among those infected...
Experimental Economics
Fear of Losing in Dynamic Auctions: An Experimental Study (with Emel Filiz-Ozbay, Erkut Ozbay, and Pacharasut Sujarittanonta), Working Paper, University of Maryland (2009)
We analyze the implications of different pricing rules in discrete clock auctions. The two most...
Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auction (with Lawrence M. Ausubel, Emel Feliz-Ozbay, Nathaniel Higgins, Erkut Ozbay, and Andrew Stocking), Working Paper, University of Maryland (2008)
We experimentally test alternative auction designs suitable for pricing and removing troubled assets from banks’...
A Review of the 10-40 GHz Auction, Report for UK Office of Communications (2008)
In February 2008, Ofcom’s 10-40 GHz auction concluded. This was Ofcom’s first combinatorial clock auction....
A Review of the L-Band Auction, Report for UK Office of Communications (2008)
In May 2008, Ofcom’s L-band auction concluded. This was Ofcom’s second combinatorial clock auction. The...
An Overview of Combinatorial Auctions (with Yoav Shoham and Richard Steinberg), ACM SIGecom Exchanges (2007)
Finance
A Two-Sided Auction for Legacy Loans (2009)
On Monday, 23 March 2009, Treasury Secretary Geithner presented the Public-Private Investment Program as a...
Making Sense of the Aggregator Bank (with Lawrence M. Ausubel), The Economists' Voice (2009)
On Tuesday, 10 February 2009, Treasury Secretary Geithner proposed the aggregator bank ("public-private investment fund")...
No Substitute for the "P" Word in Financial Rescue (with Lawrence M. Ausubel), The Economists' Voice (2009)
Fears of pricing troubled assets have needlessly stalled the rescue effort, according to Lawrence Ausubel...
Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auction (with Lawrence M. Ausubel, Emel Feliz-Ozbay, Nathaniel Higgins, Erkut Ozbay, and Andrew Stocking), Working Paper, University of Maryland (2008)
We experimentally test alternative auction designs suitable for pricing and removing troubled assets from banks’...
Auctions for Injecting Bank Capital (Addendum to 'A Troubled Asset Reverse Auction') (with Lawrence M. Ausubel), Working Paper, University of Maryland. (2008)
Public discussion has turned, in the past few days, toward using some of the $700...
Industrial Organization
Essential Entry: Revenues in the 700 MHz Spectrum Auction, White Paper, University of Maryland (2007)
A common misconception is that an open access provision on a sliver of the 700...
Revenues in the 700 MHz Spectrum Auction (with Andrzej Skrzypacz and Robert Wilson), White Paper, University of Maryland (2007)
There have been several comments that criticize auction rules that prevent the two major low-frequency...
Product Design for Colombia’s Regulated Market, Report for Colombia’s Comisión de Regulación de Energía y Gas (2007)
This paper presents a product design for Colombia’s regulated market (MOR), which is scheduled to...
Market-Based Alternatives for Managing Congestion at New York’s LaGuardia Airport (with Michael O. Ball, Lawrence M. Ausubel, Frank Berardino, George Donohue, Mark Hansen, and Karla Hoffman), Optimal Use of Scarce Airport Capacity, Proceedings of AirNeth Annual Conference (2007)
We summarize the results of a project that was motivated by the expiration of the...
Why We Need to Stick with Uniform-Price Auctions in Electricity Markets (with Steven Stoft), Electricity Journal (2007)
Wholesale electricity markets are commonly organized around a spot energy market. Buyers and suppliers submit...
Labor
ESOP Fables: The Impact of Employee Stock Ownership Plans on Labor Disputes (with Hamid Mehran and Joseph Tracy), Working Paper, University of Maryland (2008)
By the early 1990s employee stock ownership plans (ESOPs) had become as prevalent in unionized...
Unions, Bargaining and Strikes (with Joseph Tracy), International Handbook of Trade Unions (2002)
Labor disputes are an intriguing feature of the landscape of industrialized economies. Economists have had...
Strikes and Holdouts in Wage Bargaining (with Joseph S. Tracy), Game Theory in the Tradition of Bob Wilson (2002)
Impacts of Strike Replacement Banks in Canada (with Morley Gunderson and Joseph Tracy), Labor Law Journal (1999)
In the labor relations area no issue generates as much controversy and division between labor...
Major Works
Combinatorial Auctions (with Yoav Shoham and Richard Steinberg) (2006)
A comprehensive book on combinatorial auctions―auctions in which bidders can bid on packages of items....
Demand Reduction and Inefficiency in Multi-Unit Auctions (with Lawrence M. Ausubel), Working Paper, University of Maryland (2002)
Auctions typically involve the sale of many related goods. Treasury, spectrum and electricity auctions are...
Strategic Delay in Bargaining with Two-Sided Uncertainty, Review of Economic Studies (1992)
The role of strategic delay is analyzed in an infinite-horizon alternating-offer model of bargaining. A...
Strikes and Holdouts in Wage Bargaining: Theory and Data (with Joseph Tracy), American Economic Review, (1992)
We develop a private-information model of union contract negotiations in which disputes signal a firm’s...
Dissolving a Partnership Efficiently (with Robert Gibbons and Paul Klemperer), Econometrica (1987)
Several partners jointly own an asset that may be traded among them. Each partner has...
Market Design
Pricing Rule in a Clock Auction (with Pacharasut Sujarittanonta), Decision Analysis (2010)
We analyze a discrete clock auction with lowest-accepted bid (LAB) pricing and provisional winners, as...
Global Carbon Pricing: Essential, Inexpensive, and Feasible (with Steven Stoft), Research Paper, Global Energy Policy Center (2009)
The failure of the international emission-capping agenda need not and should not block the path...
Using Forward Markets to Improve Electricity Market Design (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Forward markets, both medium term and long term, complement the spot market for wholesale electricity....
Virtual Power Plant Auctions (with Lawrence M. Ausubel), Working Paper, University of Maryland (2009)
Since their advent in 2001, virtual power plant (VPP) auctions have been widely implemented. In...
Prediction Markets to Forecast Electricity Demand (with Luciano I. de Castro), Working Paper, University of Maryland (2009)
Forecasting electricity demand for future years is an essential step in resource planning. A common...
Matching
Combinatorial Auctions (with Yoav Shoham and Richard Steinberg) (2006)
A comprehensive book on combinatorial auctions―auctions in which bidders can bid on packages of items....
Mechanism Design
Combinatorial Auctions (with Yoav Shoham and Richard Steinberg) (2006)
A comprehensive book on combinatorial auctions―auctions in which bidders can bid on packages of items....
Ratifiable Mechanisms: Learning from Disagreement (with Thomas R. Palfrey), Games and Economic Behavior (1995)
In a mechanism design problem, participation constraints require that all types prefer the proposed mechanism...
Relational Investing and Agency Theory (with Ian Ayres), Cardozo Law Review (1994)
This Article analyzes how, and when, corporate governance could be improved by utilizing "relational investing."...
Cartel Enforcement with Uncertainty About Costs (with Thomas R. Palfrey), International Economic Review (1990)
What cartel agreements are possible when firms have private information about production costs? For private...
Dissolving a Partnership Efficiently (with Robert Gibbons and Paul Klemperer), Econometrica (1987)
Several partners jointly own an asset that may be traded among them. Each partner has...
Natural Resources
How Best to Auction Natural Resources, Handbook of Oil, Gas And Mineral Taxation (2009)
I study the design of auctions of natural resources, such as oil or mineral rights....
Report on Key Design Elements of Auctions Under Australia's Carbon Pollution Reduction Scheme, Tradeslot Report to Australian Department of Climate Change, [Ch. 9 Auction Design, Australian White Paper] (2008)
Auctioning Long-term Gas Contracts in Colombia, Report for Colombia’s Comisión de Regulación de Energía y Gas (2008)
This paper presents an approach to auctioning long-term gas contracts in Colombia. I propose an...
Innovation and Market Design, Innovation Policy and the Economy (2008)
Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport...
An Overview of Combinatorial Auctions (with Yoav Shoham and Richard Steinberg), ACM SIGecom Exchanges (2007)
Q54
Price Is a Better Climate Commitment (with Steven Stoft), The Economists' Voice (2010)
At the international level, a global carbon price is a better form of commitment to...
Telecommunications
Pricing Rule in a Clock Auction (with Pacharasut Sujarittanonta), Decision Analysis (2010)
We analyze a discrete clock auction with lowest-accepted bid (LAB) pricing and provisional winners, as...
Fear of Losing in Dynamic Auctions: An Experimental Study (with Emel Filiz-Ozbay, Erkut Ozbay, and Pacharasut Sujarittanonta), Working Paper, University of Maryland (2009)
We analyze the implications of different pricing rules in discrete clock auctions. The two most...
Spectrum Auction Design, Working Paper, University of Maryland (2009)
Spectrum auctions are used by governments to assign and price licenses for wireless communications. The...
Auctioning the Digital Dividend, Communications Regulation in the Age of Digital Convergence: Legal and Economic Perspectives (2009)
I begin by describing some of the problems of the simultaneous ascending auction. Then I...
A Review of the 10-40 GHz Auction, Report for UK Office of Communications (2008)
In February 2008, Ofcom’s 10-40 GHz auction concluded. This was Ofcom’s first combinatorial clock auction....
Transportation
Market-Based Alternatives for Managing Congestion at New York’s LaGuardia Airport (with Michael O. Ball, Lawrence M. Ausubel, Frank Berardino, George Donohue, Mark Hansen, and Karla Hoffman), Optimal Use of Scarce Airport Capacity, Proceedings of AirNeth Annual Conference (2007)
We summarize the results of a project that was motivated by the expiration of the...
Combinatorial Auctions (with Yoav Shoham and Richard Steinberg) (2006)
A comprehensive book on combinatorial auctions―auctions in which bidders can bid on packages of items....
Comments on Alternative Policy Options for Managing Capacity and Mitigating Congestion and Delay at LaGuardia Airport, U.S. Department of Transportation, Docket Nos. FAA–2001–9852, FAA–2001–9854 (2002)
Recommending auctions to manage congestion at LaGuardia.