Advanced auction design: when the textbook breaks
Where standard auction advice stops working: strong favourites, suppliers who must win, rings, hidden fields, split awards and long contracts, and the design moves that fix each one.
About this course
Standard auction advice assumes similar bidders, private values and no collusion. Real tenders break those assumptions all the time. This course takes each one in turn and shows what changes: suppliers who must win, a strong favourite, bidders who quietly coordinate, a split award, a long contract.
For each problem you get the design move that fixes it: a handicap, a ceiling price you can commit to, disclosure rules, indexation. You test them with calculators and simulations rather than formulas.
Who it's for: Procurement specialists and analysts who already know the basic auction formats and design tenders for a living.
What you'll be able to do
- Diagnose which revenue-equivalence condition a real tender breaks, and what that means for the format
- Design handicaps, ceiling prices and disclosure rules that lower the expected price without wrecking credibility
- Detect and pre-empt tacit collusion, bid signalling and demand reduction
- Protect long-term contracts from the ratchet effect by choosing what the tender reveals and indexing prices
Syllabus: 10 lessons
When the tie breaks
Module 1When revenue equivalence breaks
Course 8 showed the surprising tie: when bidders are similar, independent, risk-neutral and know their own values, every standard auction format earns the same on average.
Fear of losing: risk aversion
Recap from Course 8: in a first-price tender you shade, adding margin to your cost and trading some chance of winning for profit when you do win.
Strong bidders and ceilings
Module 2Handicap the favourite: optimal auctions
A puzzle. You're selling a contract worth exactly 1 to Bidder Strong. Bidder Weak values it at 1 half the time and at 0 the other half. Bids can be 0, 0.25, 0.5, 0.75 or 1.
Reserve prices: set, hide, commit
Recap from Course 3: your walk-away point comes from your best alternative to a deal. Here's a twist: you can set your ceiling price below your true walk-away, on purpose.
Rings, beliefs and splits
Module 3Collusion and signalling in auctions
Recap from Course 1: collusion survives when the future gain from co-operating beats today's gain from cheating.
Let them guess: hiding the number of bidders
In a sealed first-price tender, a supplier doesn't bid against its rivals. It bids against what it thinks its rivals are. That makes beliefs a design lever.
Single vs dual sourcing: the price of security
Recap from Course 6: splitting an award into unequal shares keeps competition alive. Like Olympic medals, unequal prizes keep everyone racing. But a second source isn't free.
Life after the award
Module 4The ratchet effect: what the tender reveals
Many manufacturers buy in more than half of what their products cost.
Index, don't renegotiate
Recap from Course 7: once you're locked in, the supplier can hold you up, so a change price list belongs in the contract. But some changes nobody can price in advance.
Stopping rules, bid steps and display
The format is the headline. The stopping rule, bid steps and what you display decide how bidders actually behave.
Final assessment and certificate
Ten questions on fresh scenarios. Score 7 or more and your certificate is issued straight away.
Questions
How long does the course take?
About 2 hours: 10 lessons totalling 113 minutes, plus a 10-minute final assessment. It's self-paced, so you can stop after any lesson and pick up where you left off.
Do I get a certificate?
Yes. Pass the 10-question final assessment (7 out of 10) and you get a certificate of completion with your name and a verification ID. You can retake the assessment as often as you like.
How much does it cost?
£9.89, a one-off payment with lifetime access. Signing up is free, and the first lesson, "When revenue equivalence breaks", is free to play before you buy.
Do I need to know any maths?
No. Everything is explained in plain English with small, worked numbers. If you can compare two prices, you can do this course.
How is it taught?
Every lesson is interactive: you play a game, make a choice or move a slider first, then the idea behind it is explained. There are no videos to sit through.