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Efficient Relocation of Spectrum Incumbents

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  • Cramton, Peter
  • Kwerel, Evan
  • Williams, John

Abstract

Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values but good public information about the cost of relocating the incumbent. We examine the experience of broadband PCS entrants in relocating microwave incumbents. We conclude with some remarks on how these ideas might be applied to digital television spectrum. Copyright 1998 by the University of Chicago.

Suggested Citation

  • Cramton, Peter & Kwerel, Evan & Williams, John, 1998. "Efficient Relocation of Spectrum Incumbents," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 647-675, October.
  • Handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:647-75
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    File URL: http://dx.doi.org/10.1086/467407
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
    3. Cramton, Peter C & Tracy, Joseph S, 1994. "Wage Bargaining with Time-Varying Threats," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 594-617, October.
    4. Peter C. Cramton, 1991. "Dynamic Bargaining with Transaction Costs," Management Science, INFORMS, vol. 37(10), pages 1221-1233, October.
    5. Peter C. Cramton, 1992. "Strategic Delay in Bargaining with Two-Sided Uncertainty," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 205-225.
    6. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
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    Citations

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    Cited by:

    1. Thomas W. Hazlett, 2008. "Optimal Abolition of FCC Spectrum Allocation," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 103-128, Winter.
    2. Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Monash Economics Working Papers archive-45, Monash University, Department of Economics.
    3. Peter Cramton, 2013. "Spectrum Auction Design," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(2), pages 161-190, March.
    4. Tomomi Tanaka, 2005. "Resource allocation with spatial externalities: Experiments on land consolidation," Experimental 0511004, EconWPA.
    5. Peter Cramton, 2002. "Spectrum Auctions," Papers of Peter Cramton 01hte, University of Maryland, Department of Economics - Peter Cramton, revised 16 Jul 2001.
    6. Lawrence M. Ausubel & Peter Cramton & Paul Milgrom, 2004. "The Clock-Proxy Auction: A Practical Combinatorial Auction Design," Papers of Peter Cramton 04mit5, University of Maryland, Department of Economics - Peter Cramton, revised 2004.
    7. Gregory Rosston, 2014. "Increasing the Efficiency of Spectrum Allocation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(3), pages 221-243, November.
    8. De Vany, Arthur, 1998. "Implementing a Market-Based Spectrum Policy," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 627-646, October.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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