Peter Cramton is Professor of Economics at the University of Maryland and European University Institute, and on the International Faculty at the University of Cologne. 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, energy, and financial auctions. On the practical side, he is an independent director on the board of the Electric Reliability Council of Texas, chief economist of Rivada, and chairman of Market Design Inc., an economics consultancy founded in 1995, focusing on the design of auction and matching markets. Since 1993, he has advised 12 governments and 36 bidders in spectrum auctions. He is a co-inventor of the spectrum auction design used in Canada, Australia, and many European countries to auction 4G spectrum. Since 2001, he has played a lead role in the design and implementation of electricity and gas auctions in North America, South America, and Europe. He has advised on the design of carbon auctions in Europe, Australia, and the United Sates, including conducting the world’s first greenhouse-gas auction held in the UK in 2002. He has led the development of innovative auctions in new applications, such as auctions for airport slots, wind rights, diamonds, medical equipment, and Internet top-level domains. He received his B.S. in Engineering from Cornell University in 1980 and his Ph.D. in Business from Stanford University in 1984.
Areas of Interest
- Market Design
- Auction Theory and Practice
- Game Theory
- Behavioral and Experimental Economics
Degree TypePhDDegree DetailsBusiness, Stanford University
Degree TypeBSDegree DetailsEngineering, Cornell University
Market design takes as given that participants interact in the market to maximize their objectives given the market rules. The question I ask is, “Are the market rules best-suited to the market’s objectives, or can they be improved?” This is a hugely important and practical question. In nearly all cases, the answer is that the market rules can be improved and often the improvements can transform entire industries for the better.
Over the last two decades, I have worked in many industries throughout the world as a market designer. My plan is to continue in the same role for the next two decades. One interesting fact is how easy it is to explain the key idea of reform in a few words. For example, here are five major industries where we can radically improve the market with a simple idea stated in a few words: communications — auction spectrum; electricity — pay for performance; transportation — price congestion; finance — make time discrete; climate — price carbon. Despite the simplicity of the idea, it takes decades of research and engagement with policymakers to demonstrate the importance of the idea, the need for reform, and see successful implementation. Fortunately, these good ideas once implemented in a particular location spread like a virus, improving the global economy. We are witnessing this today in electricity and communications. My hope and expectation is that this progress will extend to other sectors in the years ahead.
- Global Carbon Pricing—We will if you will, , In review, January .
- An International Carbon-Price Commitment Promotes Cooperation, , Economics of Energy & Environmental Policy, 4:2, 51-64 4(2 ), 51-64, September .
- Designed to Fail: The Medicare Auction for Durable Medical Equipment, , Economic Inquiry 53(1 ), 469-485, January .
- Price Carbon—I will if you will, , Nature 526(7573 ), 315-316, October .
- Symposium on International Climate Negotiations, , Economics of Energy & Environmental Policy 4(2 ), 1-64, September .
- The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response, , Quarterly Journal of Economics 130(4 ), 1547-1621, November .
- Demand Reduction and Inefficiency in Multi-Unit Auctions, , Review of Economic Studies 81(4 ), 1366-1400, October .
- Implementation Details for Frequent Batch Auctions: Slowing Down Markets to the Blink of an Eye, , American Economic Review P&P 104(5 ), 418-424, May .
- Capacity Market Fundamentals, , Economics of Energy & Environmental Policy, 2:2 2(2 ), September .
- How to Negotiate Ambitious Global Emissions Abatement, , Working paper, May .
- Discrete Clock Auctions: An Experimental Study, , Experimental Economics 15(2 ), 309-322, June .
- Economics and Design of Capacity Markets for the Power Sector, , Zeitschrift für Energiewirtschaft 36(2 ), 113-134, June .
- Fear of Losing in a Clock Auction, , Review of Economic Design 16(2 ), 119-134, September .
- Global Climate Games: How Pricing and a Green Fund Foster Cooperation, , Economics of Energy & Environmental Policy 1(2 ), March .
- How to Fix the Inefficiency of Global Cap and Trade, , The Economists’ Voice 9(1 ), 1-5, April .
- The CMS Auction: Experimental Studies of a Median-Bid Procurement Auction with Non-Binding Bids, , Quarterly Journal of Economics 127(2 ), 793-827, May .
- Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auctions, , Handbook of Market Design, ed. by Nir Vulkan, Alvin E. Roth, and Zvika Neeman, May .
- Early Pilots of Medicare Auctions Bring No Solace to Auction Experts, , The Economists’ Voice 8(2 ), 1-4, July .
- Ökonomik und Design von Kapazitätsmärkten im Stromsektor, , Energiewirtschaftliche Tagesfragen 61(9 ), 14-15, January .
- Auctioning Greenhouse Gas Emissions Permits in Australia, , Australian Journal of Agricultural and Resource Economics 54(2 ), 219-238, April .
- International Climate Games: From Caps to Cooperation, , Global Energy Policy Center, Research Paper No. 10‐07, August .
- Kyoto’s Climate Game and How to Fix It, , Global Policy Center, Issue Brief 10‐08, August .
- Price is a Better Climate Commitment, , The Economists’ Voice 7(1 ), January .
- Reducing Healthcare Costs Requires Good Market Design, , The Economists’ Voice 7(4 ), October .
- Using Forward Markets to Improve Electricity Market Design, , Utilities Policy 18(4 ), 195-200, December .
- Virtual Power Plant Auctions, , Utilities Policy 18(4 ), 201-208, December .
- Wind Energy in Colombia: A Framework for Market Entry, , The World Bank, Washington, DC 1, 1-122, July .
- Global Carbon Pricing: A Better Climate Commitment, , Global Energy Policy Center, Research Paper No. 09‐06, December .
- Making Sense of the Aggregator Bank, , The Economists' Voice 6(3 ), February .
- No Substitute for the 'P'-Word in Financial Rescue, , The Economists' Voice 6(2 ), February .
- Prediction Markets to Forecast Electricity Demand, , Working Paper, August .
- Auction Design Critical for Rescue Plan, , The Economists’ Voice 5(5 ), 1-3, September .
- Forward Reliability Markets: Less Risk, Less Market Power, More Efficiency, , Utilities Policy 16(3 ), 194-201, September .
- Comments on the RGGI Market Design, , Report for ISO New England and NYISO, November .
- Why We Need to Stick with Uniform-Price Auctions in Electricity Markets, , The Electricity Journal 20(1 ), 26-37, January .
- Combinatorial Auctions, , MIT Press, January .
- The Convergence of Market Designs for Adequate Generating Capacity, , White Paper, California Electricity Oversight Board, April .
- A Capacity Market that Makes Sense, , The Electricity Journal 18(7 ), 43-54, September .
- Review of the Proposed Reserve Markets in New England, , White Paper, Market Design Inc, January .
- The Clock-Proxy Auction: A Practical Combinatorial Auction Design, , Combinatorial Auctions, January .
- Auctioning Many Divisible Goods, , Journal of the European Economic Association 2(2 ), 480-493, April .
- Competitive Bidding Behavior in Uniform-Price Auction Markets, , Proceedings of the Hawaii International Conference on System Sciences, January .
- Unions, Bargaining and Strikes, , International Handbook of Trade Unions, October .
- Tradeable Carbon Permit Auctions: How and Why to Auction Not Grandfather, , Energy Policy 30(4 ), 333-345, March .
- A Review of Markets for Clean Air: The U.S. Acid Rain Program, , Journal of Economic Literature 38(3 ), 627-633, September .
- Impacts of Strike Replacement Bans in Canada, , Labor Law Journal 50(3 ), 173-179, September .
- The Distributional Effects of Carbon Regulation, , The Market and the Environment, Cheltenham, United Kingdom: Edward Elgar, chapter 12, January .
- The Effect of Collective Bargaining Legislation on Strikes and Wages, , The Review of Economics and Statistics 81(3 ), 475-487, August .
- The Role of the ISO in U.S. Electricity Markets: A Review of Restructuring in California and PJM, , The Electricity Journal 12(3 ), 71-81, April .
- Auctions and Takeovers, , New Palgrave Dictionary of Economics and the Law, January .
- Efficient Relocation of Spectrum Incumbents, , Journal of Law and Economics 41(S2 ), 647-675, October .
- The Use of Replacement Workers in Union Contract Negotiations: The U.S. Experience, 1980–1989 , , Journal of Labor Economics, 16:4, 667-701 16(4 ), 667-701, October .
- Using Auctions to Divest Generation Assets, , The Electricity Journal 10(10 ), 22-31, December .
- Deception and Mutual Trust: A Reply to Strudler, , Journal of Business Ethics 5(4 ), 813-822, October .
- Relational Investing and Agency Theory, , Cardozo Law Review 15, 1033-1066, January .
- The Determinants of U.S. Labor Disputes, , Journal of Labor Economics 12(2 ), 180-209, April .
- Wage Bargaining with Time-Varying Threats, , Journal of Labor Economics 12(4 ), 594-617, October .
- Promoting Honesty in Negotiation: An Exercise in Practical Ethics, , Business Ethics Quarterly 3(4 ), 359-394, October .
- Strategic Delay in Bargaining with Two-Sided Uncertainty, , Review of Economic Studies 59(1 ), 205-225, January .
- Strikes and Holdouts in Wage Bargaining: Theory and Data, , American Economic Review 82(1 ), 100-121, March .
- Dynamic Bargaining with Transaction Costs, , Management Science 37(10 ), 1221-1233, October .
- Shrewd Bargaining on the Moral Frontier: Toward a Theory of Morality in Practice, , Business Ethics Quarterly 1(2 ), 135-167, April .
- Using Auction Theory to Inform Takeover Regulation, , Journal of Law, Economics, and Organization 7(1 ), 27-53
- Dissolving a Partnership Efficiently, , Econometrica 55(3 ), 615-632, May .
- Sequential Bargaining Mechanisms, , Game-Theoretic Models of Bargaining, Alvin Roth (ed.), Cambridge University Press, Chapter 8, 149–179, January .
- Bargaining with Incomplete Information: An Infinite-Horizon Model with Two-Sided Uncertainty, , Review of Economic Studies 51(4 ), 579-593, January .
Pacharasut SujarittanontaChulalongkorn University
Nathaniel HigginsUSDA Economic Research Service
Matias Herrera DappeThe World Bank
Andrew StockingDepartment of Energy
Dipan GhoshCRA International
Martin RangerMartin Ranger Photographer
Jeffrey LienUS Department of Justice
Allan IngrahamEconomists Incorporated
Jesse SchwartzKennesaw State University
Laurent MartinBank of Canada
Hector LopezRivada Networks