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How (Not) to Run Auctions: The European 3G Telecom Auctions

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Klemperer, Paul

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Abstract

There were enormous differences in the revenues from the European ‘third generation’ (3G, or ‘MTS’) mobile-phone license auctions, from 20 Euros per capita in Switzerland to 650 Euros per capita in the UK, though the values of the licences sold were similar. Poor auction designs in some countries facilitated collusion between firms and failed to attract entrants. The sequencing of the auctions was also crucial. We discuss the auctions in the UK, Netherlands, Germany, Italy, Austria, Switzerland, Belgium, Greece and Denmark.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3215.

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Date of creation: Feb 2002
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Handle: RePEc:cpr:ceprdp:3215

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Related research
Keywords: 3g; auctions; bidding; spectrum auctions; telecommunications; umts;

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Paul Klemperer, 2000. "Why Every Economist Should Learn Some Auction Theory," Microeconomics 0004009, EconWPA. [Downloadable!]
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  2. Paul Klemperer, 2002. "Using and Abusing Economic Theory," Economics Papers 2003-W02, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
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  3. Veronika Grimm & Frank Riedel & Elmar Wolfstetter, 2001. "The Third Generation (UMTS) Spectrum Auction in Germany," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  4. Klemperer, Paul, 2000. "What Really Matters in Auction Design," CEPR Discussion Papers 2581, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Ballard, Charles L & Shoven, John B & Whalley, John, 1985. "General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States," American Economic Review, American Economic Association, vol. 75(1), pages 128-38, March. [Downloadable!] (restricted)
  6. Jeremy Bulow & Ming Huang & Paul Klemperer, 1999. "Toeholds and Takeovers," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 427-454, June. [Downloadable!] (restricted)
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  7. Klemperer, P., 1999. "Auction Theory: a Guide to the Literature," Economics Papers 1999-w12, Economics Group, Nuffield College, University of Oxford.
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  8. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April. [Downloadable!] (restricted)
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  9. Plott, Charles R. & Salmon, Timothy C., 2004. "The simultaneous, ascending auction: dynamics of price adjustment in experiments and in the UK3G spectrum auction," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 353-383, March. [Downloadable!] (restricted)
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  10. Jeremy Bulow & Paul Klemperer, 2002. "Prices and the Winner's Curse," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 1-21, Spring.
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  11. Börgers, Tilman & Dustmann, Christian, 2001. "Strange Bids: Bidding Behaviour in the United Kingdom's Third Generation Spectrum Auction," CEPR Discussion Papers 3072, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  12. Binmore, Kenneth & Klemperer, Paul, 2002. "The Biggest Auction Ever: The Sale of the British 3G Telecom Licences," CEPR Discussion Papers 3214, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Bikhchandani, Sushil, 1988. "Reputation in repeated second-price auctions," Journal of Economic Theory, Elsevier, vol. 46(1), pages 97-119, October. [Downloadable!] (restricted)
  14. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer. [Downloadable!] (restricted)
  15. Alan Beggs & Kathryn Graddy, 1997. "Declining Values and the Afternoon Effect: Evidence from Art Auctions," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 544-565, Autumn. [Downloadable!] (restricted)
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  16. John Cable & Andrew Henley & Kevin Holland, 2002. "Pot of gold or winner's curse? An event study of the auctions of 3G mobile telephone licences in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 23(4), pages 447-462, December.
  17. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Wellenius, Bjorn & Neto, Isabel, 2005. "The radio spectrum : opportunities and challenges for the developing world," Policy Research Working Paper Series 3742, The World Bank. [Downloadable!]
  2. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter. [Downloadable!] (restricted)
    Other versions:
  3. Peter Cramton & Andrzej Skrzypacz & Robert Wilson, 2007. "Revenues in the 700 MHz Spectrum Auction," Papers of Peter Cramton 07rev700, University of Maryland, Department of Economics - Peter Cramton, revised 2007. [Downloadable!]
  4. Binmore, Kenneth & Klemperer, Paul, 2002. "The Biggest Auction Ever: The Sale of the British 3G Telecom Licences," CEPR Discussion Papers 3214, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Marja Appelman & Joeri Gorter & Mark Lijesen & Sander Onderstal & Richard Venniker, . "Equal rules or equal opportunities? Demystifying level playing field," CPB Documents 34, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Marco Pagnozzi, 2006. "Are Disadvantaged Bidders Doomed in Ascending Auctions?," CSEF Working Papers 169, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
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  7. Marco Pagnozzi, 2004. "Bidding to Lose? Auctions with Resale," CSEF Working Papers 116, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
  8. Jacob K. Goeree & Theo Offerman & Randolph Sloof, 2009. "Demand reduction and preemptive bidding in multi-unit license auctions," IEW - Working Papers iewwp430, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  9. Ehrhart, Karl-Martin & Ott, Marion, 2003. "Auctions, Information, and New Technologies," Sonderforschungsbereich 504 Publications 04-05, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
  10. Maija Gao & Ari Hyytinen & Otto Toivanen, 2005. "Demand for Mobile Internet: Evidence from a Real-World Pricing Experiment," Discussion Papers 964, The Research Institute of the Finnish Economy. [Downloadable!]
  11. Roberto Burguet & R. Preston McAfee, 2008. "License Prices for Financially Constrained Firms," UFAE and IAE Working Papers 745.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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  12. Noumba Um, Paul & Dinghem, Severine, 2005. "Private participation in infrastructure projects in the Republic of Korea," Policy Research Working Paper Series 3689, The World Bank. [Downloadable!]
  13. Antonio Estache & Atsuhi Iimi, 2008. "Procurement Efficiency for Infrastructure Development and Financial Needs Reassessed," ECARES Working Papers 2008_022, Université Libre de Bruxelles, Ecares. [Downloadable!]
    Other versions:
  14. Philippe Jehiel & Benny Moldovanu, 2005. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Discussion Papers 142, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  15. Grigorieva, Elena & Herings, P. Jean-Jacques & Müller, Rudolf & Vermeulen, Dries, 2006. "Inefficiency of equilibria in query auctions with continuous valuations," Research Memoranda 017, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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  16. Michael S. Gibson, 2007. "Credit derivatives and risk management," Finance and Economics Discussion Series 2007-47, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  17. Hultkrantz, Lars, 2005. "A review of universal-service policy," Working Papers 2005:5, Örebro University, Swedish Business School. [Downloadable!]
  18. Young Han Lee & Ulrike Malmendier, 2007. "The Bidder's Curse," NBER Working Papers 13699, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  19. Adriaan R. Soetevent & Marco A. Haan & Pim Heijnen, 2008. "Do Auctions and Forced Divestitures increase Competition?," Tinbergen Institute Discussion Papers 08-117/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  20. IVALDI, Marc & JULLIEN, Bruno & REY, Patrick & SEABRIGHT, Paul & TIROLE, Jean, 2003. "The Economics of Tacit Collusion," IDEI Working Papers 186, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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