The Effect of Incumbent Bidding in Set-Aside Auctions: An Analysis of Prices in the Closed and Open Segments of FCC Auction 35
AbstractThis paper examines the impact of an incumbent carrier’s participation in two simultaneously conducted auctions: one set-aside for non-incumbents and one open to all carriers. This paper estimates the extent to which prices in the closed auction were inflated by the participation of incumbents. This paper also estimates what prices would have been in the open auction had incumbents been excluded from bidding in the closed. It is found that an incumbent’s participation in the closed auction through a front, Alaska Native, enabled it to win more licenses at lower prices in FCC Auction 35. In contrast, non-incumbents won fewer licenses and paid more for what they won. The econometric techniques employed here to estimate prices in a “but for” world could be replicated in future damage analysis. Finally, this paper suggests an alternative method of screening bidders seeking access to set-aside auctions that would be consistent with the FCC’s goal of promoting competition in the wireless industry.
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Bibliographic InfoPaper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 08ibsaa.
Length: 17 pages
Date of creation: 2008
Date of revision: 2008
Publication status: Published in Telecommunications Policy, 32, 273-290, 2008
Contact details of provider:
Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu
Auctions; spectrum auctions; market design;
Other versions of this item:
- Cramton, Peter & Ingraham, Allan T. & Singer, Hal J., 0. "The effect of incumbent bidding in set-aside auctions: An analysis of prices in the closed and open segments of FCC Auction 35," Telecommunications Policy, Elsevier, vol. 32(3-4), pages 273-290, April.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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