Will Bidder Exclusions Increase Auction Revenue? A Review of the Arguments
7 Pages Posted: 12 Mar 2014
Date Written: June 11, 2013
In this PERSPECTIVE, I will review the arguments made to exclude AT&T and Verizon from the spectrum Incentive Auction scheduled in 2015. These argument is that the exclusion of the larger provides will increase auction revenues. My analysis seeks to determine whether or not economics support their “revenue enhancement by exclusion” hypothesis. It does not. As I explain, exclusion advocates are playing fast-and-loose with economic theory. Upon inspection, the research used to support the revenue enhancement hypothesis show that excluding the two larger carriers will, in fact, reduce auction revenues. Additionally, the research cited the exclusion advocates consistently and fervently warns about the dangers of such exclusions.
Keywords: spectrum auctions, incentive auctions, auctions, bidder exclusion
JEL Classification: L96, D44
Suggested Citation: Suggested Citation