Can Market Forces and an Interference Limit Together Promote the Efficient Co-existence of Radio Systems

42 Pages Posted: 18 May 2020

See all articles by William Sharkey

William Sharkey


Mark Bykowsky

Federal Communications Commission

Date Written: April 16, 2020


We examine the ability of market forces, augmented by an “interference limit,” to improve the efficiency with which radio systems co-exist. In a bargaining game with incomplete information, an interference limit can increase the likelihood that two radio system operators can come to a mutually beneficial agreement about both the level of interference that should exist between two radio systems and the price the benefiting party should pay to establish that level of interference. It can achieve this by changing the bargaining environment in a way that makes it more likely that an efficiency enhancing agreement can occur. By imposing a cost upon the system operator from using low quality receivers, it can also lead to the manufacture of higher quality receivers. An interference limit’s ability to improve the efficiency of the co-existence of two radio systems depends, in part, on whether the regulator has “good” information regarding the level of benefit and harm that operators experience from a given level of interference. The better this information, the greater the likelihood than an interference limit will improve efficiency. When the regulator doesn’t have good information about the harm that an interfered-with operator experiences from a given interference limit level, an interference limit can lead to a less efficient level of co-existence of radio systems.

Keywords: Harm Claim Threshold, Co-existence Rules, Receiver Mask, Transmission Mask, Interference Limit, Signal Interference, Bilateral Bargaining, Disagreement Outcome, Incomplete Information

JEL Classification: D60, D61, D62, D80

Suggested Citation

Sharkey, William and Bykowsky, Mark, Can Market Forces and an Interference Limit Together Promote the Efficient Co-existence of Radio Systems (April 16, 2020). Available at SSRN: or

Mark Bykowsky

Federal Communications Commission ( email )

445 12th Street SW
Rm. TW-B204
Washington, DC 20554
United States

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