RAA calls NY slot auction scheme 'eBay on Psychedelics'
“At today’s seminar for potential bidders [in the auction for slots at New York's airports] in Crystal City, VA, one of the FAA’s contractors for the New York airport slot auction, Peter Cramton of Market Design, called it ‘eBay on steroids’. After reading the handouts and listening for three hours, it’s more like eBay on psychedelics”, said Regional Airline Association (RAA) president Roger Cohen. As an example Cohen cited an item from the documentation.
A4.8 “Selecting the bidder-optimal core point that is closest to the Vickrey prices determines a unique set of prices, as shown in Figure 6. This is true, since the Vickrey prices are always unique and minimizing the Euclidean distance is strictly a concave optimization (a quadratic), and so has a unique solution” (FAA 2009 New York Slot Auctions, Version 1.0: 5 December 2008, page A21). Source: www.slotauction.com.
“One thing we do understand that was made crystal clear at today’s Crystal City seminar – auctioning slots at JFK, LaGuardia and Newark will certainly make it more expensive and less convenient – perhaps even impossible – for passengers from the 75% of the nation that relies exclusively on regional airlines to fly into New York,” Cohen declared.