Geoff,

An auction is a great idea. One of the biggest problems with the H1-B allocation process is that it does NOT differentiate on the basis of economic value. As you noted - the costs to an employer of getting a relatively low-wage/low value H1-B and a high-value H1-B are the same under the present system. But the economic impact to the US is very different. By creating a market for H1-Bs we could differentiate these two and slew the supply toward those who have the best opportunity to contribute.

I can speak with direct experience on this. In my first company we needed only a single H1-B, but we needed her desparately. We planned on paying her well. For us, the cost of managerial time and anxiety of dealing with the current H1-B process - formulating back-up plans, uncertainty/risk were easily worth $5K.

One might have to think about some of the specifics of the market mechanism: how often should one have an auction? Weekly? Is a secondary market necessary or desirable?

I also wonder if anyone has ever thought about this sort of approach. The immigration bill is bumping along in Congress like a pair of tennis shoes in the dryer. It's not clear yet what's going to come out or whether there's any time left for innovative alternatives. Fort starters, it would be interesting to see how TechNet (Silicon Vally's lobbying arm) would view the idea...

(Surely those folks at Ebay would love it...)

Peter