Measuring the Efficiency of an FCC Spectrum Auction
| Autor: | Patrick Bajari, Jeremy T. Fox |
|---|---|
| Rok vydání: | 2013 |
| Předmět: |
TheoryofComputation_MISCELLANEOUS
Computer Science::Computer Science and Game Theory Demand reduction 05 social sciences TheoryofComputation_GENERAL jel:D44 jel:D45 jel:H82 jel:L0 jel:L82 jel:L5 Mobile phone 0502 economics and business Collusion jel:C1 Common value auction Pairwise comparison Business Allocative efficiency 050207 economics General Economics Econometrics and Finance Industrial organization 050205 econometrics Spectrum auction Block (data storage) |
| Zdroj: | American Economic Journal: Microeconomics. 5(1):100-146 |
| DOI: | 10.1257/mic.5.1.100 |
| Popis: | 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) T he US Federal Communications Commission (FCC) auctions licenses of radio spectrum for mobile phone service, employing an innovative simultaneous ascending auction. We study data from the 1995–1996 auction of licenses for the C block of the 1900 MHz PCS spectrum band. The C block divided the continental United States into 480 small, geographically distinct licenses. A mobile phone car rier that holds two geographically adjacent licenses can offer mobile phone users a greater contiguous coverage area. One intent of auctioning small licenses is to allow bidders, rather than the FCC, to decide where geographic complementarities lie. Bidders can assemble packages of licenses that maximize the benefits from geographic complementarities. The US practice of dividing the country into small geographic territories differs markedly from European practice, where nationwide licenses are often issued. These nationwide licenses ensure that the same provider will operate in all markets, so that all geographic complementarities are realized. Economic theory suggests that the allocation of licenses in a simultaneous ascending auction need not be allocatively efficient. Brusco and Lopomo (2002) |
| Databáze: | OpenAIRE |
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