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The Biggest Auction Ever: The Sale of the British 3G Telecom Licences

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  • Klemperer, Paul
  • Binmore, Kenneth

Abstract

This paper reviews the part played by economists in organizing the British third-generation mobile-phone licence auction that concluded on 27 April 2000. It raised £22½ billion ($34 billion or 2½ % of GNP) and was widely described at the time as the biggest auction ever. We discuss the merits of auctions versus ?beauty contests?, the aims of the auction, the problems we faced, the auction designs we considered, and the mistakes that were made.

Suggested Citation

  • Klemperer, Paul & Binmore, Kenneth, 2002. "The Biggest Auction Ever: The Sale of the British 3G Telecom Licences," CEPR Discussion Papers 3214, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3214
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    References listed on IDEAS

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    1. Abbink, Klaus & Irlenbusch, Bernd & Pezanis-Christou, Paul & Rockenbach, Bettina & Sadrieh, Abdolkarim & Selten, Reinhard, 2005. "An experimental test of design alternatives for the British 3G/UMTS auction," European Economic Review, Elsevier, vol. 49(2), pages 505-530, February.
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      • Marco Pagnozzi, 2003. "Sorry Winners," CSEF Working Papers 108, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 May 2007.
    14. Richard J. Gilbert & Paul Klemperer, 2000. "An Equilibrium Theory of Rationing," RAND Journal of Economics, The RAND Corporation, vol. 31(1), pages 1-21, Spring.
    15. Klemperer, Paul, 2002. "How (not) to run auctions: The European 3G telecom auctions," European Economic Review, Elsevier, vol. 46(4-5), pages 829-845, May.
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    20. Tilman Börgers & Christian Dustmann, 2005. "Strange Bids: Bidding Behaviour in the United Kingdom's Third Generation Spectrum Auction," Economic Journal, Royal Economic Society, vol. 115(505), pages 551-578, July.
    21. Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
    22. Brusco, Sandro & Lopomo, Giuseppe, 1999. "Collusion via signaling in open ascending auctions with multiple objects and complementarities," DEE - Working Papers. Business Economics. WB 6518, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
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    24. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
    25. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
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    More about this item

    Keywords

    Auctions; Telecommunications; Spectrum auctions; Mobile phones; 3g; Umts; Bidding;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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