Multi-Unit Auction Theory And Its Application In Automobile License Plate

Shanghai automobile license plate auction with a history of more than 100 years has been adjusted a dozen times. Currently, it becomes the typical form of synchronous multi-same-quality-unit auction. At present, Shanghai is the only city in China where auction has been chosen as the main method of public resources distribution. Hence, it has been widely concerned and accompanied by disputes in the society since the early days it appeared.First and foremost, this article analyzes the positive and negative effects of choosing auction as the distribution method on Shanghai residents'public profit from the perspective of public policy and the differences between domestic and foreign cities. The benign aspects include: it alleviates the urban traffic problem to some extent; it increases the local fiscal revenue for infrastructure. But on the contrary, the auction system also restrains the purchase of private vehicle, which is not conducive to consumer-driven economic growth; it distorts the market, which is not conducive to favorable traffic management; and it encourages vehicle owners to increase utilization, which is not conducive to environmental protection. To sum up, there are mutual gains and losses while auction has been chosen as the distribution method. To solve the problem of traffic jams, restrictions on vehicle consumption by increasing parking fees and imposing congestion charges could be better solutions, rather than directly increasing the cost of purchase.Besides, based on Vickrey's private value model of single-unit auction, this article modeling several major multi-unit auction including: Discriminate Auction (DA), Uniform Price Auction (UPA), and Simultaneous Ascending Auction (SAA). And solutions to the optimal auction strategy and minimum bid price are provided. Moreover, from the perspective of mathematical model, this article compares some issues of these models, which contain minimum bid price, validity, and conspiracy problem. DA has a minimum of minimum bid prices; all the three auction models are valid; UPA can best prevent the occurrence of conspiracy, while SAA is most likely to make it happen.Last but not least, this article discusses the changes before and after the adjustment in January 2008. Firstly, from the perspective of the models, 0801 Adjustment could be considered as a transition from DA to DA plus limited SAA. This kind of adjustment can reduce auction prices and minimum bid prices in particular. It can also increase benefits of the people with low private value. Secondly, from the perspective of empirical analysis, bid price has a negative factor linear relationship with license plate number. Besides, the factor becomes smaller after the adjustment, which means a more sensitive relationship. Combined with the analysis above, this article believes that when it comes to suppressing the rising bid price, 0801 Adjustment has been successful. But it also brings negative effects such as lack of fairness and rising discontent with organizer. To reduce the limitation of limited SAA would be the further adjustment in the future, which actually cannot solve the problems discussed above.