I don't think auctions necessarily get to the maximum revenue, but they do get to a market clearing price. (An auction doesn't have to be "everyone who wins pa

I don't think auctions necessarily get to the maximum revenue, but they do get to a market clearing price. (An auction doesn't have to be "everyone who wins pays what they bid"; instead it can be "everyone who wins pays what the last person to squeeze in pays." I'm pretending for simplicity that "parking spot" is perfectly fungible when they obviously vary a lot by time and location.) I.e., say $N is the price at which no one willing to pay $N can't get a spot, and say $M is the price at which the city maximizes revenue. $M could be greater than $N, and it's a policy decision on the city's part which to choose. [1] If the problem is insufficient parking, though, charging less than $N is the solution. If "auction" doesn't work to get you there, find some other method that does. [1] (And it should be upfront to its citizens about which it chooses. Red-light cameras often are said to be about safety even if they end up causing accidents, because it helps the city get revenue.)