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This theory finds its origins in field of economics. It is said to be an applied branch of the very same field. In this theory, many ways in which people act in auctions are included. This theory also describes properties possessed by auction markets. An auction may follow a certain rule or set of multiple rules. Such sets of rules are known as auction designs. These designs are also a part of this particular theory. Auction theory is said to be a representation of a standard and utilized design for real life auctions. This theory particularly targets auction designs for public sector companies and the use of sale of license.
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