Endogenous Entry and Realized Prices in National 3G Spectrum Auctions

Posted: 13 Feb 2019

See all articles by Gary Madden

Gary Madden

Curtin University - School of Economics and Finance

Johannes M. Bauer

Michigan State University-Department of Media and Information

Nicholas Apergis

University of Piraeus; University of Derby

Date Written: February 3, 2019

Abstract

This paper examines the relationships between spectrum auction design and the prices paid for national 3G wireless licenses. Of particular interest is how auction features that can be modified by policy-makers determine prices paid for spectrum. Our theoretical and empirical analysis is based on the premise that auction design features affect both final and intermediate auction outcomes, such as revenues, auction competitiveness, and license assignments. It recognizes, and explicitly allows for, the endogeneity of bidder entry and sample selection arising from an absence of bidding. The analysis shows that flexible-package formats were associated with higher prices, and that higher reserve prices had a dampening effect. It also shows that longer license terms and more competitive auctions were associated with higher spectrum prices.

Keywords: spectrum auctions; prices paid; endogenous entry

JEL Classification: D44; L13; L96

Suggested Citation

Madden, Gary and Bauer, Johannes M. and Apergis, Nicholas, Endogenous Entry and Realized Prices in National 3G Spectrum Auctions (February 3, 2019). Available at SSRN: https://ssrn.com/abstract=3328217

Gary Madden

Curtin University - School of Economics and Finance ( email )

GPO Box U 1987
Perth, Western Australia 6845
Australia
(08) 9266 7763 (Phone)
(08) 9266 3026 (Fax)

Johannes M. Bauer (Contact Author)

Michigan State University-Department of Media and Information ( email )

409 Communication Arts Building
East Lansing, MI 48824-1212
United States
517-355-8372 (Phone)
517-355-1292 (Fax)

HOME PAGE: http://www.msu.edu/~bauerj

Nicholas Apergis

University of Piraeus ( email )

Karaoli and Dimitriou 80
80 KARAOLI & DIMITRIOU STREET
Piraeus, Attiki 18534
Greece

University of Derby ( email )

Kedleston Road
Derby, Derbyshire DE22 1GB
United Kingdom

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