Competitive bidding: Cramton to demo how 'efficient' auction works

Monday, March 7, 2011

BALTIMORE – Prof. Peter Cramton, a vocal critic of the competitive bidding program as it’s currently designed, has invited stakeholders, including HME providers, to attend a conference and participate in a mock auction on April 1.

The mock auction will “demonstrate how an efficient auction works,” Cramton, a professor of economics at the University of Maryland, stated in his invitation.

“The Medicare auction program is currently in a pilot stage, but (it) will soon be expanding nationwide,” he stated. “This is a critical opportunity to debate the basic issues, as well as learn about the latest auction methods that could simplify and improve the effectiveness and sustainability of the auction program.”

The Medicare Auction Conference, sponsored by the National Science Foundation and the University of Maryland, will take place at the Inn and Conference Center in College Park, Md.

Here’s Cramton’s description of the mock auction:

“This involves all participants interacting via a commercial auction platform that is programmed with the proposed auction rules. In the mock auction about 90 bidding teams compete to be DME providers for six product categories in nine regions. Each team is given a specific business plan, including the company’s cost of providing service for the product categories and regions the company is interested in. The teams get to experience the auction first-hand. The task involves active learning: thinking about how the auction works, thinking about bidding strategy, and then actually bidding in the mock auction, just as you would in a real auction.”

Cramton and his colleagues have held similar conferences and mock auctions in other industries, such as transportation, communication and energy.

Space at the conference will be limited to about 200 attendees—roughly 40 government (agency officials and congressional staffers) and 160 non-government (HME providers, Medicare beneficiaries). Registration is free for government and $80 for non-government.

To register, go to