Peter Cramton

Country:	USA
Email:	pcramton[at]gmail.com
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Dr. Peter Cramton is a Professor of Economics at the University of Maryland, where he has taught since 1993. He is also an Affiliate of Agriculture and Resource Economics at the University. He is a leading expert and researcher on auction theory and practice, and has been involved in the field since 1983. His firm, Cramton Associates, is one of 3 prominent firms offering Private gTLD Auction services to gTLD applicants in contention. That is, given that there are more than 700 TLDs that have been applied for by more than one party a winner must be determined. ICANN has provided for an "Auction of Last Resort" but trusts that most applicants can resolve their own contention sets before this. The Private Auction model is an instance of innovation within the community to address the intricacies of the ICANN gTLD delegation process.

Previous teaching positions include two positions at the Yale School of Management at Yale University, first as an Assistant Professor of Decision Theory and later as an Associate Professor of Economics and Management. Dr. Cramton was also a National Fellow of the Hoover Institution at Stanford University.

Links to his publications can be found here.

Experience

Much of his most high-profile auction experience comes from working with governments to auction off resource rights, such as spectrum, energy, and emissions auctions. Since 1993, he has advised 12 governments and 36 bidders in spectrum auctions and is a co-inventor of the spectrum auction design used in Canada, Australia, and many European countries to auction 4G spectrum. Dr. Cramton has played a lead role designing and implementing electricity and gas auctions across the Americas and Europe since 2001. He conducted the world's first greenhouse-gas auction in the UK in 2002, and has acted as an advisor on carbon auctions elsewhere in Europe, and in Australia and the United Sates. New auction initiatives he has developed include auctions for airport slots, wind rights, diamonds, medical equipment, and his current work with gTLD applicants for Internet top-level domains.

Education

Peter Cramton received his B.S. in Engineering from Cornell University in 1980 and his Ph.D. in Business from Stanford University in 1984.

Honors

• Resident Scholar, Rockefeller Foundation, Villa Serbelloni, Bellagio, Italy, Spring 2007.
• Departmental Undergraduate Teaching Award, Spring 1996 (2), Spring 1997 and Spring 2002.
• Departmental Graduate Teaching Award, Fall 1994, Fall 1998, and Fall 2007.
• Hoover National Fellow, Hoover Institution, Stanford University, 1992-93.
• Winner of the 1984 Leonard J. Savage Thesis Award for an outstanding dissertation in Bayesian Economics.
• American Assembly of Collegiate Schools of Business Doctoral Fellowship, 1983-84.
• National Association of Purchasing Management Scholarship, 1983-84.
• Dean’s Award for Service to Stanford University, 1983-84.
• Two-time recipient of Stanford Merit Fellowship, 1981-83.
• Elected by the Operations Research faculty as outstanding senior, 1980.

New gTLD Auctions

Cramton Associates is one of three visible providers of Private Auction services for gTLD applicants, the other two being Right of the Dot and Sedo. Cramton Associates' model is preferred by the largest TLD applicant, Donuts. Raymond King, applicant for 10 TLDs with Top Level Design expressed his favor for Private Auctions in general, and Cramton Associates specifically in an opinion piece on CircleID.

During ICANN 45 in Toronto, Dr. Peter Cramton outlined an "ascending clock" model, where a price is increased by the auctioneer at each stage; bidders and sellers can then either drop out or bid on the increased amount. ICANN has identified the same style of auction for its own Auction of Last Resort. At his presentation following the ICANN Draw in December, 2012, Dr. Cramton also also addressed a sequential first-price sealed bid, noting that the ascending clock model is still preferred given that it involves: better price discovery, better deposit management, reduced tendency to overbid, and is more consistent with the ICANN Auction of Last Resort. He continues to defend his decision to exclusively offer one style of auction, as opposed to Right of the Dot's three options, by writing on CircleID, "Choosing an auction design is not a matter of taste, or of favoring one bidder over another. There is a whole field in economics concerned with determining what the best auction is for a particular situation. Thousands of scientific papers have been written on the subject and much has been learned from decades of study." He goes on to note that using an independent system and auction provider, uniform across auctions, takes away the need to negotiate the auction style between the parties and creates a more predictable playing field.

Cramton's original model proposed to run auctions during the first quarter of 2013, before ICANN announced the results of their Initial Evaluation. Such a model would allow losing bidders to receive 70% back from their ICANN application fee, but would pose difficulties if winning applicants later discovered their applications were rejected as other applicants would have withdrawn already, and the new gTLD would be left without an owner. The former model also lumped all TLDs that an individual applicant had applied for in one package. Criticisms stating that such a model would benefit larger companies led to a change, so that auctions will now proceed on a TLD-by-TLD basis, with all auctions being simultaneously resolved at the same time.

The new proposal is to hold one set of auctions before Initial Evaluations are posted, with a commitment made before the end of February 2013, and the auction happening in March. The second auction would come after Initial Evaluations are posted with commitment made before the end of August, 2013 and auctions taking place in September. Mock auctions are held before the actual auctions. Cramton Associates has subsequently planned for a third auction to be held around June 2013 for those contention sets that complete their Initial Evaluation early.

Cramton and Associates have secured their fees at 1% for the first round, 2% for the second round, and 4% for the third round. There is a floor of $1 million USD and a ceiling of $5 million on the third round. The escalation of prices helps account for the higher cost of expenses due to offering multiple application rounds.

His slides from his most recent presentation on his auction plan, including results and analysis of a mock auction, can be found here.

Top-Level Domain