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Auctioning coal blocks (a case for India)

Student name: Ms Shubhangi Jaiswal
Guide: Mr Soumendu Sarkar
Year of completion: 2013
Host Organisation: TERI University

Abstract: The aim of this paper is to design a revenue maximising auction for allocation of coal blocks in India through a system of competitive bidding and taking it further, following a game theoretic approach to devise an optimal method for the government to avoid dishonest bidding. The auction format chosen here is an open auction where the winner pays the second highest bid (English Auction). This mechanism turns out to be revenue maximising and efficient. An Extension of the format to a two period game defines what actions players will take in equillibrium (when one player maximises his pay-off given the other player’s action).

Key words: Coal blocks, Coal block allocation, English Auction, Bayesian Game.