Low Price Equilibrium in Multi-Unit Auctions: The Gsm Spectrum Auction in Germany

20 Pages Posted: 1 Aug 2001

See all articles by Veronika Grimm

Veronika Grimm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics

Frank Riedel

Bielefeld University - Center for Mathematical Economics

Elmar Wolfstetter

Humboldt University of Berlin - Faculty of Economics; Korea University - College of Economics and Commerce; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 2001

Abstract

The second-generation GSM spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid auction. The present paper gives an account of the events, describes the auction rules and market conditions, and provides a theoretical explanation of low price equilibria in simultaneous, ascending-bid auctions. In particular it is shown that the low price equilibrium that implements the efficient allocation is the unique perfect equilibrium of that game.

Keywords: Multi-Unit Auctions, Spectrum Auctions, Telecommunications, Industrial Organization, Game Theory

JEL Classification: D44, D45

Suggested Citation

Grimm, Veronika and Riedel, Frank and Wolfstetter, Elmar G., Low Price Equilibrium in Multi-Unit Auctions: The Gsm Spectrum Auction in Germany (June 2001). CESifo Working Paper Series No. 506. Available at SSRN: https://ssrn.com/abstract=277283

Veronika Grimm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics ( email )

Nuremburg
Germany

Frank Riedel

Bielefeld University - Center for Mathematical Economics ( email )

Postfach 10 01 31
Bielefeld, D-33501
Germany

Elmar G. Wolfstetter (Contact Author)

Humboldt University of Berlin - Faculty of Economics ( email )

Institut für Wirtschaftstheorie I
Spandauer Strasse 1
Berlin
Germany
+49 30 2093 5652/3 (Phone)
+49 30 2093 5619 (Fax)

HOME PAGE: http://www2.hu-berlin.de/wt1wo/staff/wolfstetter/index.html

Korea University - College of Economics and Commerce ( email )

Anam-dong, Sungbuk-Ku
Seoul, 136-701
Korea

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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