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Auction design and auction outcomes

Koutroumpis, Pantelis and Cave, Martin (2018) Auction design and auction outcomes. Journal of Regulatory Economics, 53 (3). pp. 275-297. ISSN 0922-680X

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Identification Number: 10.1007/s11149-018-9358-x

Abstract

We study the impact of spectrum auction design on the prices paid by telecommunications operators for two decades across 85 countries. Our empirical strategy combines information about competition in the local market, the level of adoption and a wide range of socio-economic indicators and process specific variables. Using a micro dataset of almost every mobile spectrum auction performed so far—both regional and national—we show that auction design affects final prices paid. Two designs (SMRA with augmented switching and CCA with core pricing) result in auctions with systematically higher normalized returns. Further, we document that spectrum ownership appears to affect prices paid in subsequent auctions. We discuss the mechanisms of cost minimization and foreclosure faced by operators in different regulatory environments. Our findings have implications for policy-makers and regulators.

Item Type: Article
Official URL: https://link.springer.com/journal/11149
Additional Information: © 2018 The Author(s)
Divisions: Law
Subjects: H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications
Sets: Departments > Law
Date Deposited: 19 Jun 2018 11:40
Last Modified: 20 Feb 2019 06:49
URI: http://eprints.lse.ac.uk/id/eprint/88371

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