Fox News and CNN have been in knots recently about how to allocate scarce debate slots to the many Republican pretenders to the oval office. Should Poll numbers be the criteria? What about gender, race, state office etc. etc. There is a simple and transparent way to allocate the slots: an auction. Neither CNN or Fox are charities. If the debates are a public good, there is no reason why Fox and CNN alone should forgo profits to host them. They should, instead auction off the rights to participate in the debates.
What design questions would have to be answered? First, how much time to allocate to the debate, i.e., what is the supply of the resource to be allocated? Second, should one auction slots or time. For example, should it be 10 slots of equal time lengths in a 2 hour time period? Or, should one allow the bidders to bid on the actual amount of time they would get in the 2 hour period? Are candidates the only ones allowed to bid, or can anyone submit bids on their behalf? Can one bid to deny time to the candidates? Actually, as these are not debates at all, but parallel news conference, perhaps one should auction off the right to answer questions. In real time. That would be entertainment!
The Leisure of the Theory Class 
2 comments
June 5, 2015 at 8:33 pm
afinetheorem
Serious question: what do we know about auction design when your private value depends on the identities of other bidders receiving some allocation from the mechanism (as surely I only care to enter a debate when other serious candidates will waste their time pontificating beside me)? If there is only one potential debate, then the optimal auction (depending on whether you want efficiency or max profits) is easy. But if there are competing auctioneers, then I imagine there are profit maximizing auctions with equilibria where Fox and CNN design mechanisms which split the candidate pool for the usual product differentiation reasons…
June 7, 2015 at 7:30 am
rvohra
Auctions with identity dependent externalities have been considered in the literature. Efficiency is `easy’ in the sense that a generalized Vickrey (or Vickrey-Clarke-Groves) scheme will do the job. Revenue maximization is harder because the private information of the bidders is now multi-dimensional. One solved case is Jehiel, Moldovanu and Stachetti in a paper titled: How (not) to sell a nuclear weapon.
Competing auctioneers: depends on whether candidates (buyers) can participate in both auctions or not. Prior work does not apply because it assumes the set of goods is given exogenously and fixed. Here, the `good’ is endogenous in the sense that the subset selected to debate (which is the good) depends on which agents chose to participate.