Designing the TARP Auction

Now that the broad terms of the bailout bill are more or less set, attention will shift to the design of the auction(s) the Treasury will use to buy troubled assets. An article in yesterday's NYT briefly discussed the difficulty of designing the best auction, and the WSJ ran a full article this morning on potential auction designs. It will no doubt be a difficult task, requiring a great deal of creativity from those designing the auction(s).

Hmmm. If only we had two well-respected economists who recently won some sort of prize for their work in designing mechanisms like auctions......