Gaming in Combinatorial Clock Auctions
AbstractCombinatorial Clock Auctions (CCAs) have recently been used around the world to allocate spectrum for mobile telecom licenses. CCAs are claimed to significantly reduce the scope for gaming or strategic bidding. This paper shows, however, that CCAs facilitate strategic bidding. Real bidders in telecom markets are not only interested in the spectrum they win themselves and the price they pay for that, but also in raising rivals’ cost. CCAs provide bidders with excellent opportunities to do so. High auction prices in recent auctions in the Netherlands and Austria are probably to a large extent due to the CCA format. Bidding under a budget constraint is also a highly complicated gaming exercise in a CCA.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 13-027/VII.
Date of creation: 11 Feb 2013
Date of revision: 16 Dec 2013
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Combinatorial auctions; Telecom markets; Raising rivals' cost;
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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