Category Archives: auction theory

Rationing for libraries

When a library finds that more than one person wants to borrow a particular book, they have to have some way of rationing access to the book — deciding who gets to borrow it first, and for how long. At my local library, they achieve this by lending books for three weeks at a time, and preventing you from renewing the loan if someone else has requested the book. If lots of other people have requested the book, I think they get to borrow the book for up to three weeks each in the order they placed their requests.

But what if the first person to borrow the book reads a few pages, gets bored, and doesn’t look at it again till it’s due back? Perhaps they intend to read the rest of the book, but never get around to it. Everyone else waiting to borrow the book might place a greater value on having earlier access to it than the first borrower places on keeping it for the full three weeks. Could the library arrange for less wasteful rationing of access to their books? Continue reading Rationing for libraries

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An auction process for preserving incentives to improve land in Jubilee

I wrote previously about how to allocate land in Jubilee. One of the problems to be solved by this procedure was that people in Jubilee might have no incentive to improve land that they had no assurance they would continue to enjoy access to in future. I described strategies that owners of improvements (and their bidding rivals) might use, and concluded that owners of improvements who wanted to retain access to the land could arrange to pay for only the unimproved value of the land.

However, I’m not satisfied with the strategies I described there. First, they rely on good estimates of the value that other bidders might place on the land and improvements (separately and together). Second, I considered only one rival bidder other than the owner of the improvements; in reality, there may be several bidders, some placing a high value on the land with the improvements and a low value on the land alone, and others placing a high value on the land alone.

So, can we do better? Continue reading An auction process for preserving incentives to improve land in Jubilee