Property Rights and Wireless License Values
While extending the scope of spectrum property rights promotes efficiency, such reforms are often deterred by equity concerns. Theoretically, however, the windfalls may be negative. Relaxing license restrictions may increase profits by allowing enhanced productivity, yet liberalization across a class of licensees can reduce the expected profits by increasing competitiveness. This article examines license value changes for regimes that decisively shift toward private property rights in radio spectrum by analyzing the average prices paid in international cellular phone license auctions during 1995-2001. This unique data set encompasses 1,365 licenses assigned by competitive bidding in 38 auctions held in 24 countries. Licenses awarded by regimes with more expansive spectrum property rights generated winning bids that were 61 percent lower, adjusting for other factors. This evidence reverses the equity argument against liberalization over the policy margin studied and is consistent with Coase's view that property rights lower retail prices, thereby increasing efficiency. (c) 2008 by The University of Chicago. All rights reserved.
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.
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.
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.:
- Paul Klemperer, 2002.
"What Really Matters in Auction Design,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 169-189, Winter.
- Klemperer, Paul, 2000. "What Really Matters in Auction Design," CEPR Discussion Papers 2581, C.E.P.R. Discussion Papers.
- Paul Klemperer, 2000. "What Really Matters in Auction Design," Economics Series Working Papers 2000-W26, University of Oxford, Department of Economics.
- Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
- Scott Wallsten, 2004. "Privatizing Monopolies in Developing Countries: The Real Effects of Exclusivity Periods in Telecommunications," Journal of Regulatory Economics, Springer, vol. 26(3), pages 303-320, 08.
- Hazlett, Thomas W, 1990. "The Rationality of U.S. Regulation of the Broadcast Spectrum," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 133-75, April.
- North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
- Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-26, June.
- Holt, Charles A, Jr, 1980. "Competitive Bidding for Contracts under Alternative Auction Procedures," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 433-45, June.
- Coppinger, Vicki M & Smith, Vernon L & Titus, Jon A, 1980. "Incentives and Behavior in English, Dutch and Sealed-Bid Auctions," Economic Inquiry, Western Economic Association International, vol. 18(1), pages 1-22, January.
- Crandall, Robert W, 1998. "New Zealand Spectrum Policy: A Model for the United States?," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 821-40, October.
- George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
- Shelanski, Howard A & Huber, Peter W, 1998. "Administrative Creation of Property Rights to Radio Spectrum," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 581-607, October.
- Hazlett Thomas W & Ibarguen Giancarlo & Leighton Wayne, 2007. "Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization," Review of Law & Economics, De Gruyter, vol. 3(2), pages 437-484, December.
- Moreton, Patrick S & Spiller, Pablo T, 1998. "What's in the Air: Interlicense Synergies in the Federal Communications Commission's Broadband Personal Communication Service Spectrum Auctions," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 677-716, October.
- Ibarguen, Giancarlo, 2003. "Liberating the radio spectrum in Guatemala," Telecommunications Policy, Elsevier, vol. 27(7), pages 543-554, August.
- L. G. Godfrey & M. R. Wickens, 1981. "Testing Linear and Log-Linear Regressions for Functional Form," Review of Economic Studies, Oxford University Press, vol. 48(3), pages 487-496.
When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:51:y:2008:i:3:p:563-598. 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: (Journals Division)
If references are entirely missing, you can add them using this form.