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August 1, 2026American Economic Journal Microeconomics2 citationsOpen Access

The Combinatorial Multi-Round Ascending Auction

BKBernhard Kasberger ATAlexander Teytelboym

Key Points

This research aims to explore the efficiency of the Combinatorial Multi-Round Ascending Auction (CMRA) format and its susceptibility to collusion.
Characterized auction-specific truthful bidding leading to efficient outcomes.
Analyzed ex post equilibria including demand expansion and reduction under varying conditions.
Proposed an alternative activity rule to mitigate collusion while maintaining equilibria.
Truthful bidding results in efficient allocation in symmetric bidder conditions.
Risk-free collusion occurs when bidders have similar caps, affecting auction integrity.
New activity rule effectively reduces the potential for collusion while preserving equilibria.

Abstract

The Combinatorial Multi-Round Ascending Auction (CMRA) is a new auction format used in recent European spectrum auctions. We show that an auction-specific version of truthful bidding leads to an efficient allocation. We then characterize different ex post equilibria that feature truthful bidding, demand expansion, and demand reduction. The truth-telling equilibrium is fragile to small asymmetries in the bidders' caps. Moreover, if bidders are sufficiently symmetric, the CMRA is vulnerable to risk-free collusion. We propose an alternative activity rule that prevents such collusive strategies while keeping other equilibria intact. We discuss outcomes of several Danish CMRAs in light of our equilibrium predictions. (JEL D44, H82, L82)

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