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Efficiency or Competition? A Structural Analysis of Canada's AWS Auction and the Set-Aside Provision

Author

Listed:
  • Kyle Hyndman

    () (Southern Methodist University)

  • Christopher F. Parmeter

    () (University of Miami)

Abstract

In 2008 Industry Canada auctioned 105MHz of spectrum to a group of bidders that included incumbents and potential new entrants into the Canadian mobile phone market, raising $4.25 billion. In an effort to promote new entry, 40MHz of spectrum was set-aside for new entrants. We adapt the methodology of Bajari and Fox (2009) to the Canadian auction setting in an effort to estimate the implicit cost (in terms of lower auction efficiency) of this policy. Our results indicate that revenue would have been approximately 10% higher without the set-aside.

Suggested Citation

  • Kyle Hyndman & Christopher F. Parmeter, 2011. "Efficiency or Competition? A Structural Analysis of Canada's AWS Auction and the Set-Aside Provision," Departmental Working Papers 1101, Southern Methodist University, Department of Economics.
  • Handle: RePEc:smu:ecowpa:1101
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    File URL: ftp://ftp1.economics.smu.edu/WorkingPapers/2011/HYNDMAN/HYNDMAN-2011-02.pdf
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    References listed on IDEAS

    as
    1. Horowitz, Joel L., 2002. "Bootstrap critical values for tests based on the smoothed maximum score estimator," Journal of Econometrics, Elsevier, vol. 111(2), pages 141-167, December.
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    More about this item

    Keywords

    Spectrum Auction; Set-Aside; Efficiency;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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