Auctions, Trading Platforms & Competitive Bidding
Auctions, trading platforms and other organized market mechanisms are increasingly used to sell or procure assets, resources, property rights, and obligations. These sophisticated mechanisms have been used in energy, telecommunications, transportation, oil & gas, natural resources, environmental, metals, commodities, and other industries.
When properly designed and applied, these mechanisms reduce information and transaction costs, create value, and achieve other important objectives. But if they are poorly designed, implemented, or understood, they can lead to unexpected difficulties and controversy, particularly in high-stakes settings.
CRA (www.trading.crai.com) has the comprehensive expertise necessary to ensure the success of auctions and other transaction mechanisms. We offer businesses, governments, bidders, and other market participant’s extensive experience in auction and market design, implementation, monitoring, and participation.
Auction & Market Design
The first step in the auction and market design process is to confirm the client’s objectives and desired outcomes; assess policy, regulatory, and industry issues; and characterize the assets, products, or contracts to be transacted.
We then evaluate the strengths and weaknesses of alternative market mechanisms, and recommend the best design based on proven theoretical foundations and practical experience with real markets.
The next step is to formalize comprehensive, unambiguous rules to describe how the auction or market process will be conducted. Our recommended designs and rules minimize gaming opportunities and encourage competitive participation. We deliver one or more reports and presentations on the market design and rules, which include our analysis and recommendations. Typically we are retained as auction or trading managers to implement the trading platform.
Auction & Market MonitoringCRA sometimes is retained as an independent third-party to act as auction monitor or market monitor. In this role, our goal is to improve on the design and implementation of the market mechanism to ensure the process is conducted in accordance with expectations and requirements and to facilitate the overall process.
Auction & Trading Platform ImplementationAfter market design and rules are established, CRA develops a detailed implementation plan that includes tasks and the timeline. Our services include document preparation, marketing and promotion, communications protocols, stakeholder consultations, information Web sites, bidder qualification, customized software such as our Auction Management System (AMS) and Trading System for Efficient Markets (TSEM®) platforms, demos, mock trading events, training, and hosting services.
Auction & Trading Platform Software
As part of our services to auctioneers and bidders, CRA develops and customizes auction software, trading platforms and support tools. Examples include our TSEM® software and Bid Tracking System (BTS) software, as well as trading platforms in several industries.
The TSEM® software enables trading administrators to conduct bidding mechanisms including multi-product, multi-lot, simultaneous multiple-round trading events. Trading administrators utilize the user-friendly software to configure the parameters of their particular trading event and to control and monitor its progress. Bidders can use the TSEM® software with a standard Web browser. The user interface allows bidders to submit bids, confirm them, and review trading results.
The BTS software is used by bidders for real-time collection, analysis, and interpretation of bidding data and results. It allows for a variety of displays, both default and user-defined. Other BTS features include optimal bid determinations, automatic generation of bid submission files, and generation of mapping data. The BTS facilitates the analysis of other bidder’s actions to optimize bidding strategy.
Bidder Strategy & SupportWe provide strategic advice and other valuable support services prior to and during the auction or market process. CRA prepares bidders and market participants for bidding through some or all of the following depending on the client’s needs:
- Analyze market mechanisms and rules and provide comments to the auctioneer or market administrator in support of our bidding client
- Conduct financial analyses and valuation of the assets or products being offered, including competition and market analyses and business case assessments
- Conduct a seminar for our client on auction and game theory, bidding strategies, and their practical applications
- Analyze the market mechanism and rules for our client, and the implications and opportunities they provide
- Analyze our client’s competitors, including their likely strategies
- Assist with the application and bidder qualification process
- Provide a logistics and operations plan and the support a client needs to be an effective participant in the bidding with the right resources
- Assist the bidder in mock auctions and train the bidder in the use of bidding software
- Customize bid-tracking software tools to facilitate interpretation of bidding data and bidding behavior
- Provide advice on optimal bidding strategies and bids
- Monitor and analyze competitors’ bids and behavior
For more information on CRA International, Inc. d/b/a Charles River Associates, visit www.crai.com and www.trading.crai.com.
CRA Trading Platform and Auction Examples
|Industry ||Scope ||Languages |
|Global Dairy Trading Platform ||Auction design and implementation of an online trading platform for dairy products. CRA runs two trading events per month for GlobalDairyTrade ||English, Spanish, Chinese |
|Cranberry Trading Platform ||Auction design and implementation of an online trading platform for cranberry juice concentrate. CRA runs four trading events per year for Ocean Spray ||English |
|Electricity Auctions||Selling and divestitures of capacity, energy, transmission rights and related services: Auction design, implementation, and monitoring for government agencies, The World Bank, and companies in Brazil, Canada, Germany, Netherlands, US||English, German|
|Electricity Procurements||Design and implementation of competitive procurements for government agencies and companies in Germany, US||English, German|
|Environment ||Auction design and implementation for trading of CSPAR emission allowances ||English |
|Spectrum Auctions||Auction design and implementation for government agencies in Australia, Canada, Mexico, New Zealand, Nigeria, Switzerland, US||English, French, German, Spanish|
|Spectrum Auctions||Bidder support for companies in Australia, Canada, Netherlands, UK, US||English|
|Intellectual Property Auctions||Design and implementation of auctions to maximize the value of IP in US, Europe||English|
|Fish Auctions ||Retained by The World Bank for auction design and process improvements for fish auctions in Kuwait ||English |
|Natural Gas Auctions and Procurements||Design, implementation, and monitoring of auctions for selling and procuring natural gas for government agencies and private companies||English|
|Railroads and Airports||Design and implementation for competitive bidding divestitures and traffic congestion management in Canada and US||English|
|Divestiture of Government Ownership Shares||Design and implementation of competitive bidding sales process to divest government ownership shares in Sweden||English|
|Mineral Rights||Design of divestiture process for mineral rights in Mexico||English, Spanish|