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Analyzing the Airwaves Auction

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  • R. Preston McAfee
  • John McMillan

Abstract

The design of the Federal Communications Commission spectrum license auction is a case study in the application of economic theory. Auction theory helped address policy questions such as whether an open auction or a sealed-bid auction should be used; whether the licenses should be auctioned sequentially or simultaneously; whether the government should allow bids for combinations of licenses or accept only single-license bids; how the auction should should be structured to promote the interests of minority-owned and other designated firms; whether the government should impose royalties or reserve prices; and how much the bidders should be informed about their competition.

Suggested Citation

  • R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:1:p:159-75
    Note: DOI: 10.1257/jep.10.1.159
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.1.159
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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