scholarly journals Measuring the Efficiency of an FCC Spectrum Auction

2013 ◽  
Vol 5 (1) ◽  
pp. 100-146 ◽  
Author(s):  
Jeremy T Fox ◽  
Patrick Bajari
Keyword(s):  
Stability Condition ◽  
Allocative Efficiency ◽  
Theoretical Models ◽  
Pairwise Stability ◽  
Spectrum Auctions ◽  
Spectrum Auction ◽  
Deterministic Component ◽  
Ascending Auctions ◽  
Demand Reduction ◽  
Stability Results

We propose a method to structurally estimate the deterministic component of bidder valuations in FCC spectrum auctions, and apply it to the 1995–1996 C block auction. We base estimation on a pairwise stability condition: two bidders cannot exchange two licenses in a way that increases the sum of their valuations. Pairwise stability holds in some theoretical models of simultaneous ascending auctions under intimidatory collusion and demand reduction. Pairwise stability results in a matching game approach to estimation. We find that a system of four large regional licenses would raise the allocative efficiency of the C block outcome by 48 percent. (JEL D44, D45, H82, L82)

scholarly journals What Really Matters in Auction Design

2002 ◽  
Vol 16 (1) ◽  
pp. 169-189 ◽  
Author(s):  
Paul Klemperer
Keyword(s):  
Mobile Phone ◽  
Competition Policy ◽  
Third Generation ◽  
Auction Design ◽  
Uniform Price ◽  
Spectrum Auctions ◽  
Sealed Bid ◽  
Ascending Auctions

The most important issues in auction design are the traditional concerns of competition policy-preventing collusive, predatory, and entry-deterring behavior. Ascending and uniform-price auctions are particularly vulnerable to these problems. The Anglo-Dutch auctiona hybrid of the sealed-bid and ascending auctions-may perform better. Effective antitrust is also critical. Notable fiascoes in auctioning mobile-phone licenses, television franchises, companies, eletricty, etc., and especially the European “third-generation” (UMTS) spectrum auctions, show that everything depends on the details of the context. Auction design is not “one size fits all.”

Hindsight in 2020? New Zealand's ‘Wait and See’ Approach to Mobile Broadband Regulation

2014 ◽  
Vol 151 (1) ◽  
pp. 171-179
Author(s):  
Michael S. Daubs
Keyword(s):  
New Zealand ◽  
Market Competition ◽  
Lessons Learned ◽  
Mobile Broadband ◽  
Broadband Service ◽  
Spectrum Auctions ◽  
Spectrum Auction ◽  
Wait And See ◽  
The Government ◽  
The Impact

New Zealand's Ministry of Business, Innovation and Employment's Review of the Telecommunications Act 2001, released in 2013, highlighted an increased demand for mobile broadband service, particularly in relation to the 700 MHz spectrum auction of 14 January 2014 – space ideal for next-generation 4G or Long Term Evolution (LTE) mobile services. The government seemingly adopted a ‘wait and see’ approach to mobile broadband regulation, however, delaying its development until 2020 when there will be ‘a clearer sense of the impact of new networks and technology’. One can look to Canada to see the need for robust mobile broadband policies. Like New Zealand, Canada has relied primarily upon spectrum auctions to stimulate market competition. The spectrum auction frameworks used there, however, have done little to promote market competition. Applying the lessons learned from Canada to a New Zealand context, this article argues for a more assertive regulatory framework sooner rather than later.

scholarly journals Inefficiency in spectrum auctions – empirical evidence

2020 ◽  
Vol 150 ◽  
pp. 115-130
Author(s):  
Agnieszka KUŚ ◽  
Keyword(s):  
Spectrum Allocation ◽  
Negative Effects ◽  
Policy Makers ◽  
Spectrum Auctions ◽  
Rigorous Approach ◽  
Spectrum Auction ◽  
Reserve Prices ◽  
Spectrum Policy ◽  
The Government ◽  
Price Distortions

Purpose: The spectrum is scarce recourses, so it is very important to allocate it in a way to maximize the economic and social returns to the countries` economies. Economists agree that the best way to allocate rare resources are auctions. Despite their good properties, in some environments, they can create inefficiency. We describe some potential sources of inefficiency in spectrum auctions and some negative effects of inefficient spectrum allocation. We also discuss how the government through appropriate spectrum policy and auction designing can promote efficient spectrum allocation. Design/methodology/approach: The paper is based on the literature on the spectrum auction and public documents published by national spectrum authorities. Theoretical discussions are supported by case studies of real world spectrum auctions. Much attention has been paid to the case of the Polish 4G auction. Findings: Extremely high reserve prices or rigorous approach to promoting entry could lead to price distortions, misallocation or even unsold spectrum which harm both competition and consumers. The case of the Polish 4G auction confirms that gaps in the detailed auction rules may lead to significant delays in frequency allocation and increase the risk of an ineffective auction outcome. Practical implications: In the light of our findings, it is important that the rules of the auction in the 3.6 GHz band currently planned in Poland should allow the regulator to control the pace of the auction and take into account the risk of inefficient outcome associated with passive bids. Originality/value: The discussions made in this paper could help policy makers in Poland and other countries in spectrum auction designing

Progress in Economics: Lessons from the Spectrum Auctions

2009 ◽  
Author(s):  
Anna Alexandrova ◽  
Robert Northcott
Keyword(s):  
The United States ◽  
Federal Communications Commission ◽  
Scientific Models ◽  
Spectrum Auctions ◽  
Spectrum Auction ◽  
Economic Progress ◽  
Partial Structures ◽  
Open Formula

This article begins by surveying existing work on scientific models, with an eye to the specific case of economics. It reviews four accounts in particular—the satisfaction-of-assumptions account, the capacities account, the credible-worlds account, and the partial-structures account. It tells the detailed story of the 1994 Federal Communications Commission (FCC) spectrum auction in the United States, highlighting the crucial role of experiment as well as theory. In the light of this case study, this article presents its own open-formula account of economic models. It then turns to the issue of economic progress. Finally, it concludes that empirical progress in economic theory might not be discussed here, or at least that the success of the spectrum auction provides no warrant for doing so. Rather, progress is better seen as more akin to the worthy but piecemeal variety typical of engineering.

scholarly journals Collusive Bidding in the FCC Spectrum Auctions

2002 ◽  
Vol 1 (1) ◽  
Author(s):  
Peter Cramton ◽  
Jesse A Schwartz
Keyword(s):  
Spectrum Auctions ◽  
Spectrum Auction

Abstract This paper describes the bid signaling that occurred in many of the FCC spectrum auctions. Bidders in these auctions bid on numerous spectrum licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to raise the bid on any license. Simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. This “code bidding” occurs when one bidder tags the last few digits of its bid with the market number of a related license. We examine how extensively bidders signaled each other with retaliating bids and code bids in the DEF-block PCS spectrum auction. We find that only a small fraction of the bidders commonly used retaliating bids and code bids. These bidders won more than 40% of the spectrum for sale and paid significantly less for their overall winnings.

scholarly journals Bidding Strategies for Simultaneous Ascending Auctions

2008 ◽  
Vol 8 (1) ◽  
Author(s):  
Michael P Wellman ◽  
Anna Osepayshvili ◽  
Jeffrey K MacKie-Mason ◽  
Daniel Reeves
Keyword(s):  
Analytic Solutions ◽  
Bidding Strategies ◽  
New Family ◽  
Ascending Auctions ◽  
Demand Reduction ◽  
Reduction Strategies ◽  
The Face ◽  
Game Theoretic ◽  
Exposure Problem ◽  
Homogeneous Good

Simultaneous ascending auctions present agents with various strategic problems, depending on preference structure. As long as bids represent non-repudiable offers, submitting non-contingent bids to separate auctions entails an exposure problem: bidding to acquire a bundle risks the possibility of obtaining an undesired subset of the goods. With multiple goods (or units of a homogeneous good) bidders also need to account for their own effects on prices. Auction theory does not provide analytic solutions for optimal bidding strategies in the face of these problems. We present a new family of decision-theoretic bidding strategies that use probabilistic predictions of final prices: self-confirming distribution-prediction strategies. Bidding based on these is provably not optimal in general. But evidence using empirical game-theoretic methods we developed indicates the strategy is quite effective compared to other known methods when preferences exhibit complementarities. When preferences exhibit substitutability, simpler demand-reduction strategies address the own price effect problem more directly and perform better.

scholarly journals Stability of switched systems with admissible switching signals

2021 ◽  
Author(s):  
Hui-Ting Wang ◽  
Yong He ◽  
Qing-Guo Wang ◽  
Chuan-Ke Zhang ◽  
Min Wu
Keyword(s):  
Nonlinear Systems ◽  
Stability Condition ◽  
Switched Systems ◽  
Dwell Time ◽  
Divergence Time ◽  
Average Dwell Time ◽  
Sufficient Condition ◽  
Switched Nonlinear Systems ◽  
Equal Compensation ◽  
Stability Results

Abstract In this paper, stability of switched systems is investigated for a class of switching signals which meet some admissibility conditions. Firstly, the admissible edge-dependent divergence time is defined in terms of admissible transition edges and it will vary with the compensation bounds. Then the admissible edge-dependent bounded maximum average dwell time (BMADT) is imposed on switching signals. As a result, a sufficient condition is obtained for globally uniformly exponential stability of switched nonlinear systems with such switching signals. Secondly, by setting the equal compensation bounds for the same reaching subsystems, the mode-dependent divergence time is defined, and then the mode-dependent BMADT is proposed. A stability condition under the mode-dependent BMADT is established. These stability results are then applied to switched linear systems. The numerical example is presented to show that the proposed techniques are less restrictive and more flexible in application, compared with the BMADT.

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