Projects
Other
UK Greenhouse Gas Emission Reductions
For the UK government, MDI has designed an auction for the UK to procure greenhouse gas emission reductions. The objective is to procure as many tons of reduction as possible for a fixed budget of 215 million pounds. MDI was subsequently awarded a contract to implement the auction, which is scheduled to take place in February 2002.
Design of Timber Auction in British Columbia
MDI is advising the British Columbia Ministry of Forests on the design of its timber auctions. A main feature of the market design is to use timber auction outcomes to price timber held under long-term tenure licenses, which is not auctioned.
Auction Design for Business-to-Business e-Commerce
MDI has advised several market makers in setting up auction markets for business-to-business e-commerce. These include NECX (now ConvergeTrade), Pharmasmarket, and Tradeweave (a QRS company). We advised TradingDynamics (now Ariba) on market design matters.
Auction Design for Mexican Mineral Rights
For Mexico’s Ministry of Commerce, MDI designed
privatization auctions of gold, silver, and phosphate mines. The design issues
involved the choice between sealed bids and open bidding; setting royalty
rates and an installment-payment scheme; and setting minimum bids. Using
geological, geochemical, geophysical, and assay data, as well as cost and
commodity price projections, we estimated the
bidders’ degree of uncertainty over the valuation of each prospect. We then
simulated the effects on bidder decisions and on expected auction revenue of
alternative auction designs, as a means of optimizing the royalty rate and
minimum bids.
Auction Design and Rules for Mexican Railroads
Paul Milgrom, MDI Chairman of the Board, led our project to advise the Mexican SCT on the auction rules for the sale of its national railroads. The objectives of the sale included the usual goal of raising revenues, but also of encouraging competition among providers and ensuring that service was continued to certain poor areas of the country.