Auction Design and Auction Outcomes

28 Pages Posted: 27 Apr 2017

See all articles by Pantelis Koutroumpis

Pantelis Koutroumpis

Oxford Martin Programme of Technological and Economic Change; University of Oxford - Institute for New Economic Thinking at the Oxford Martin School; Imperial College Business School

Martin Cave

London School of Economics

Date Written: April 26, 2017

Abstract

We study the impact of auction design on the final prices paid by telecommunications operators for the past two decades across the world. Our empirical strategy combines information about competition in the local market, the level of adoption and a wide range of socio-economic indicators. 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 combinations of lot pricing and package rules (SMRA with augmented switching and CCA with core pricing) result in auctions with systematically higher normalized returns. Further, the past history of spectrum awards appears to affect prices paid in subsequent auctions. Previous ownership of commercial lots is linked with higher prices paid per lot which varies across national and regional licences. 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.

Keywords: Auction, Digital Communications, Spectrum, Market Power

JEL Classification: D44, C78, L96

Suggested Citation

Koutroumpis, Pantelis and Cave, Martin, Auction Design and Auction Outcomes (April 26, 2017). Available at SSRN: https://ssrn.com/abstract=2958745 or http://dx.doi.org/10.2139/ssrn.2958745

Pantelis Koutroumpis (Contact Author)

Oxford Martin Programme of Technological and Economic Change ( email )

University of Oxford
34 Broad Street
Oxford, OX1 3BD
United Kingdom
01865610388 (Phone)
OX1 3BD (Fax)

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School ( email )

Eagle House
Walton Well Road
Oxford, OX2 6ED
United Kingdom

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Martin Cave

London School of Economics ( email )

United Kingdom
07958483709 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
165
Abstract Views
562
rank
199,559
PlumX Metrics