Abstract:Technology auction in practice often adopts the mode of fixed fee ( English) auction,where its price is irrelevant to output. In order to connect technology price with its output,the paper puts forward a two traffic auction mechanism. That is,the winner’s payment consists of a fixed fee and a royalty. At first,English auction is analyzed as a benchmark. Then,an optimal technology auction mechanism of symmetric independent private valueis studied,in which each firm reports its cost. It is found that the winner is the buyer with the lowest cost,fixed fee and royalty of technology price are determined by the firms’reported cost,and a reserve price is not needed. Two-traffic auctions lead to higher expected revenues for the seller,and a higher auction rate.