Peter Cramton

Peter Cramton is Professor of Economics at the University of Maryland. 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 auctions, electricity auctions, and treasury auctions. On the practical side, he is Chairman of Market Design Inc., an economics consultancy founded in 1995, focusing on the design of auction markets. Since 2001, he has played a lead role in the design and implementation of electricity auctions in France and Belgium, gas auctions in Germany, and the world’s first auction for greenhouse gas emissions held in the UK in 2002. He has advised numerous governments on market design and has advised dozens of bidders in high-stake auction markets. Since 1997, he has advised ISO New England on electricity market design and was a lead designer of New England’s forward capacity auction. He led the design of electricity and gas markets in Colombia, including the Firm Energy Market, the Forward Energy Market, and the Long-term Gas Market. Since June 2006, he played a leading role in the design and development of Ofcom’s spectrum auctions in the UK. He has advised the UK, the US, and Australia on greenhouse gas auction design. He led the development of the FAA’s airport slot auctions for the New York City airports. He received his B.S. in Engineering from Cornell University and his Ph.D. in Business from Stanford University.

Anatomy of a Failed “Auction” for Medicare Supplies

Today the Centers for Medicare and Medicaid Services (CMS) set arbitrary prices for Medicare Durable Medical Equipment (DME) supplies based on CMS’ flawed bidding process. It was not the bidders who set the prices, but CMS through its arbitrary manipulation of the quantities associated with each bidder. CMS was able to pick any price between the lowest bid made …

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Market Design word cloud

    I created the following “Market Design” word cloud with a Google Scholar search “auction OR matching OR ‘market design’”. Then I eliminated words without content like the, or, and. The font buysoma size is proportional to the square-root of the word frequency. I used this as the Community Picture for the newly formed …

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Medicare auction gets failing grade at Congressional hearing

After working over two years to reform the Medicare auctions for home medical equipment (supplies like oxygen and diabetes test strips), I was finally given the opportunity to testify before Congress on the matter. Below are links to my testimony, transcript, video, and further comments: “Medicare Auction Reform,” Testimony of Peter Cramton before the United States …

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Medicare auctions update: video and legislation

Here is a quick update on the Medicare auctions. You may recall that one month ago on June 17, President Obama received a letter from 244 concerned auction experts on the Medicare competitive bidding program for durable medical equipment, pointing out the fatal flaws in the Medicare auctions. Since that time, I and others have had discussions …

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Congressional briefing on Medicare auctions identifies fatal flaws

On 24 May 2011, a Medicare competitive bidding update was presented to Congress. The event organized by Congresswoman Nancy Johnson and Professor Peter Cramton included a diverse and talented panel of experts: Peter Cramton, Professor of Economics, University of Maryland; Tom Milam, Member, Program Advisory and Oversight Committee (PAOC), Former COO, AmMed Direct; Barbara Rogers, …

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Congressional briefing on incentive auctions to re-purpose TV spectrum

On 23 May 2011, a Congressional briefing, “Spectrum Incentive Auctions: the Nuts, Bolts and Economics,” hosted by the Technology Policy Institute, focused on the economics of auctions and how spectrum incentive auctions should be structured to provide the most efficient outcomes for stakeholders. The FCC and the Administration want to make 120 MHz of spectrum currently …

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Congressional briefing on Medicare auction program

I wish to announce an important event on the Hill on Tuesday, discussing the Medicare DME Competitive Bidding Program: Competitive Bidding Congressional Update—What You Need to Know, 11-12:30, 24 May 2011, 1539 Longworth House Office Building, sponsored by U.S. Representative Sue Myrick (R-NC). The event is organized by former Congresswoman Nancy Johnson and myself, and …

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PAOC meeting on Medicare competitive bidding: The train wreck hasn’t happened yet

Program Advisory and Oversight Committee (PAOC) Dear PAOC Members: On 5 April 2011, you met at CMS headquarters in Baltimore to examine the status of the Medicare competitive bidding program. I was grateful that the meeting was open to the public and that I had an opportunity to meet many of you. I was also …

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Medicare auction update: It still needs to be fixed!

On 1 April 2011, 110 stakeholders in the Medicare Durable Medical Equipment (DME) industry came to the University of Maryland to discuss how the CMS’ current competitive bidding program could be improved. The participants included Medicare providers, government leaders, and auction experts. A major part of the event was the conduct of a mock auction …

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Other market design blogs

There are several active blogs on market design. Two of the best are: 1. Al Roth’s (together with Peter Coles’) Market Design blog. This blog started in 2008. It is especially strong on matching market applications, such as kidney exchanges, school find viagra choice, and hospital-medical-student matching. 2. Noam Nisan’s Algorithmic Game-Theory/Economics blog. This blog …

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Welcome!

Welcome to the market design blog on cramton.umd.edu. This blog features news and discussions on market design topics. It will take through the New Year for me to beginning adding much content to this blog, so please be patient. I welcome your comments and interest. Peter Cramton