An Econometric Analysis of 3G Auction Spectrum Valuations
AbstractScarce radio spectrum is assigned to mobile network operators (MNOs) by national regulatory authorities (NRAs). Spectrum is usually assigned by beauty contest or an auction. The process requires that winners make a payment to the government. MNOs seek scarce spectrum to enable the provision of wireless services for profit. While MNOs are imperfectly aware of their costs, NRAs rely solely on MNOs for this information. As such, NRAs set spectrum assignment conditions (including minimum bid price) largely ignorant of MNO operating conditions. This study examines the performance of 3G auction outcomes in terms of the prices paid by winners via an econometric analysis of a unique sample of national 3G spectrum auctions. These winning bids depend on national and mobile market conditions, spectrum package attributes, license process, and post-award operator requirements. Finally, model estimation accounts for the censored nature of these data.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European University Institute in its series RSCAS Working Papers with number 2010/55.
Date of creation: 01 Jul 2010
Date of revision:
Mobile telephone markets; spectrum allocation; spectrum bid price;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-03 (All new papers)
- NEP-IND-2010-09-03 (Industrial Organization)
- NEP-NET-2010-09-03 (Network Economics)
- NEP-REG-2010-09-03 (Regulation)
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.:
- S. Illeris & G. Akehurst, 2002. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 22(1), pages 1-3, January.
- J. A. Hausman, 1976.
"Specification Tests in Econometrics,"
185, Massachusetts Institute of Technology (MIT), Department of Economics.
- Paul Klemperer, 2000.
"What Really Matters in Auction Design,"
Economics Series Working Papers
2000-W26, University of Oxford, Department of Economics.
- 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.
- Paul Klemperer, 2001. "How (Not) to Run Auctions: the European 3G Telecom Auctions," Economics Papers 2002-W5, Economics Group, Nuffield College, University of Oxford, revised 01 Nov 2001.
- Paul Klemperer, 2001. "How (Not) to Run Auctions: The European 3G Telecom Auctions," Economics Series Working Papers 2002-W05, University of Oxford, Department of Economics.
- Klemperer, Paul, 2002. "How (Not) to Run Auctions: The European 3G Telecom Auctions," CEPR Discussion Papers 3215, C.E.P.R. Discussion Papers.
- Gandal, Neil & Salant, David & Waverman, Leonard, 0. "Standards in wireless telephone networks," Telecommunications Policy, Elsevier, vol. 27(5-6), pages 325-332, June.
- Tilman Börgers & Christian Dustmann, 2003. "Awarding telecom licences: the recent European experience," Economic Policy, CEPR & CES & MSH, vol. 18(36), pages 215-268, 04.
- Gruber,Harald, 2005. "The Economics of Mobile Telecommunications," Cambridge Books, Cambridge University Press, number 9780521843270, April.
- McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-21, May.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- Gruber, Harald, 2001. "Spectrum limits and competition in mobile markets: the role of licence fees," Telecommunications Policy, Elsevier, vol. 25(1-2), pages 59-70, February.
- McMillan, John, 1995. "Why auction the spectrum?," Telecommunications Policy, Elsevier, vol. 19(3), pages 191-199, April.
- Hazlett, Thomas W, 1998. "Assigning Property Rights to Radio Spectrum Users: Why Did FCC License Auctions Take 67 Years?," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 529-75, October.
- Faulhaber, Gerald R., 2006. "The future of wireless telecommunications: Spectrum as a critical resource," Information Economics and Policy, Elsevier, vol. 18(3), pages 256-271, September.
- John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
- Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Development Research Unit Working Paper Series archive-45, Monash University, Department of Economics.
- Burguet, Roberto & Sakovics, Jozsef, 1996. "Reserve Prices without Commitment," Games and Economic Behavior, Elsevier, vol. 15(2), pages 149-164, August.
- L. Cartelier, 2003. "Auctions Versus Beauty Contests: The Allocation of UMTS Licences in Europe," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 74(1), pages 63-85, 03.
- Harald Gruber, 2002. "Endogenous Sunk Costs in the Market for Mobile Telecommunications - The Role of Licence Fees," The Economic and Social Review, Economic and Social Studies, vol. 33(1), pages 55-64.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RSCAS web unit).
If references are entirely missing, you can add them using this form.