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Low Price Equilibrium in Multi-Unit Auctions: The GSM Spectrum Auction in Germany

  • Veronika Grimm
  • Frank Riedel
  • Elmar G. Wolfstetter

The second-generation GSM spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid auction.The present paper gives an account of the events, describes the auction rules and market conditions, and provides a theoretical explanation of low price equilibria in simultaneous, ascending-bid auctions.In particular it is shown that the low price equilibrium that implements the efficient allocation is the unique perfect equilibrium of that game.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 506.

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Date of creation: 2001
Date of revision:
Handle: RePEc:ces:ceswps:_506
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  1. Ulrich Kamecke, 1993. "Dominance or Maximin: How to Solve an English Auction," Discussion Paper Serie A 418, University of Bonn, Germany.
  2. van Damme, E.E.C., 2002. "The European UMTS-auctions," Other publications TiSEM 6194adbb-6fa3-4fc0-ae52-a, Tilburg University, School of Economics and Management.
  3. Cramton, Peter, 1998. "Ascending auctions," European Economic Review, Elsevier, vol. 42(3-5), pages 745-756, May.
  4. repec:oup:restud:v:69:y:2002:i:2:p:407-36 is not listed on IDEAS
  5. Grimm, Veronika & Riedel, Frank & Wolfstetter, Elmar, 2001. "The third generation (UMTS) spectrum auction in Germany," SFB 373 Discussion Papers 2001,70, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  6. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
  7. Chatterjee, K. & Samuelson, L., 1989. "Perfect Equilibria In Simultaneous- Offers Bargaining," Papers 12-87-3, Pennsylvania State - Department of Economics.
  8. repec:oup:restud:v:65:y:1998:i:2:p:185-210 is not listed on IDEAS
  9. 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.
  10. Paul Milgrom, . "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Working Papers 98002, Stanford University, Department of Economics.
  11. Menezes, Flavio M., 1996. "Multiple-unit English auctions," European Journal of Political Economy, Elsevier, vol. 12(4), pages 671-684, December.
  12. repec:oup:qjecon:v:93:y:1979:i:4:p:675-89 is not listed on IDEAS
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