IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

The Biggest Auction Ever: the Sale of the British 3G Telecom Licences

  • Ken Binmore

    (University College London)

  • Paul Klemperer

    (Nuffield College, Oxford)

This paper reviews the part played by economists in organising the British third-generation mobile-phone licence auction that concluded on 27 April 2000. It raised £22½ billion ($34 billion or 2½% of GNP) and was widely described at the time as the biggest auction ever. We discuss the merits of auctions versus "beauty contests”, the aims of the auction, the problems we faced, the auction designs we considered, and the mistakes that were made. Copyright Royal Economic Society 2002.

If 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.

File URL:
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Royal Economic Society in its journal Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 478 (March)
Pages: C74-C96

in new window

Handle: RePEc:ecj:econjl:v:112:y:2002:i:478:p:c74-c96
Contact details of provider: Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page:

More information through EDIRC

Order Information: Web:

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.:

as in new window
  1. Sandro Brusco & Giuseppe Lopomo, 1999. "Collusion via Signalling in Open Ascending Auctions with Multiple Objects and Complementarities," Working Papers 99-05, New York University, Leonard N. Stern School of Business, Department of Economics.
  2. Jeremy Bulow & Paul Klemperer, 1999. "Prices and the Winner's Curse," Game Theory and Information 9904003, EconWPA.
  3. Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA.
  4. Klaus Abbink & Bernd Irlenbusch & Paul Pezanis-Christou & Bettina Rockenbach & Abdolkarim Sadrieh & Reinhard Selten, 2001. "An Experimental Test of Design Alternatives for the British 3G / UMTS Auction," Bonn Econ Discussion Papers bgse25_2001, University of Bonn, Germany.
  5. Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
  6. 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.
  7. ehiel, Philippe & Benny Moldovanu & Ennio Stacchetti, 1994. "How (not) to sell nuclear weapons," Discussion Paper Serie B 288, University of Bonn, Germany.
  8. Gilbert, Richard & Klemperer, Paul, 1993. "An Equilibrium Theory of Rationing," CEPR Discussion Papers 805, C.E.P.R. Discussion Papers.
  9. Milgrom, Paul, 1998. "Putting auction theory to work : the simultaneous ascending auction," Policy Research Working Paper Series 1986, The World Bank.
  10. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Cramton Peter & Schwartz Jesse A, 2002. "Collusive Bidding in the FCC Spectrum Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-20, December.
  12. Martin Feldstein, 1999. "Tax Avoidance And The Deadweight Loss Of The Income Tax," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 674-680, November.
  13. Roger B. Myerson & Mark A. Satterthwaite, 1981. "Efficient Mechanisms for Bilateral Trading," Discussion Papers 469S, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  14. Richard Engelbrecht-Wiggans & Charles M. Kahn, 2005. "Low-Revenue Equilibria in Simultaneous Ascending-Bid Auctions," Management Science, INFORMS, vol. 51(3), pages 508-518, March.
  15. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar, volume 0, number 1585, March.
  16. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
  17. Wruck, Karen Hopper, 1994. "Financial policy, internal control, and performance Sealed Air Corporation's leveraged special dividend," Journal of Financial Economics, Elsevier, vol. 36(2), pages 157-192, October.
  18. Jeremy Bulow & Ming Huang & Paul Klemperer, 1996. "Toeholds and Takeovers," Finance 9608001, EconWPA.
  19. Cramton, Peter & Schwartz, Jesse A, 2000. "Collusive Bidding: Lessons from the FCC Spectrum Auctions," Journal of Regulatory Economics, Springer, vol. 17(3), pages 229-52, May.
  20. Plott, Charles R. & Salmon, Timothy, 2002. "The Simultaneous, Ascending Auction: Dynamics of Price Adjustment in Experiments and in the U.K. 3G Spectrum Auction," Working Papers 1155, California Institute of Technology, Division of the Humanities and Social Sciences.
  21. Tilman Börgers & Christian Dustmann, 2005. "Strange Bids: Bidding Behaviour in the United Kingdom's Third Generation Spectrum Auction," Economic Journal, Royal Economic Society, vol. 115(505), pages 551-578, 07.
  22. 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.
  23. Marco Pagnozzi, 2003. "Sorry Winners," CSEF Working Papers 108, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 May 2007.
  24. 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.
  25. Paul Klemperer & Jeremy Bulow, 1998. "The Tobacco Deal," Economics Series Working Papers 1999-W11, University of Oxford, Department of Economics.
  26. Jeremy Bulow & Paul Klemperer, 1994. "Auctions vs. Negotiations," NBER Working Papers 4608, National Bureau of Economic Research, Inc.
  27. Paul Klemperer (ed.), 2000. "The Economic Theory of Auctions," Books, Edward Elgar, volume 0, number 1669, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:112:y:2002:i:478:p:c74-c96. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.