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An Experimental Test of Design Alternatives for the British 3G / UMTS Auction

Author

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  • Abbink, Klaus
  • Irlenbusch, Bernd
  • Pezanis-Christou, Paul
  • Rockenbach, Bettina
  • Sadrieh, Abdolkarim
  • Selten, Reinhard

Abstract

In spring 2000, the British government auctioned off licences for Third Generation mobile telecommunications services. In the preparation of the auction, two designs involving each a hybrid of an English and a sealed-bid auction were suggested by the government: a discriminatory and a uniform price variant. We report an experiment on these two designs, and also compare the results to those with a pure English auction. Both hybrids are similar in efficiency, revenue differences disappear as bidders get experienced. Compared to the discriminatory format, the pure English auction gives new entrants better chances.

Suggested Citation

  • Abbink, Klaus & Irlenbusch, Bernd & Pezanis-Christou, Paul & Rockenbach, Bettina & Sadrieh, Abdolkarim & Selten, Reinhard, 2001. "An Experimental Test of Design Alternatives for the British 3G / UMTS Auction," Bonn Econ Discussion Papers 25/2001, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:252001
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    References listed on IDEAS

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    Cited by:

    1. Kirchkamp, O. & Reiss, J.P. & Sadrieh, A., 2008. "A pure variation of risk in private-value auctions," Research Memorandum 050, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Hans‐Theo Normann & Roberto Ricciuti, 2009. "Laboratory Experiments For Economic Policy Making," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 407-432, July.
    3. Abbink, Klaus & Brandts, Jordi & Pezanis-Christou, Paul, 2006. "Auctions for government securities: A laboratory comparison of uniform, discriminatory and Spanish designs," Journal of Economic Behavior & Organization, Elsevier, vol. 61(2), pages 284-303, October.
    4. Daniel Marszalec, 2016. "Revisiting the Anglo-Dutch Auction," CIRJE F-Series CIRJE-F-1021, CIRJE, Faculty of Economics, University of Tokyo.
    5. Martin Bichler & Pasha Shabalin & Jürgen Wolf, 2013. "Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 511-545, December.
    6. Ken Binmore & Paul Klemperer, 2002. "The Biggest Auction Ever: the Sale of the British 3G Telecom Licences," Economic Journal, Royal Economic Society, vol. 112(478), pages 74-96, March.
    7. Klaus M. Schmidt, 2009. "The Role of Experiments for the Development of Economic Theories," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(s1), pages 14-30, May.
    8. van Damme, Eric, 2002. "The European UMTS-auctions," European Economic Review, Elsevier, vol. 46(4-5), pages 846-858, May.
    9. Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multiunit Auctions," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 461-490, July.
    10. Dejan Trifunović & Bojan Ristić, 2013. "Multi-Unit Auctions In The Procurement Of Electricity," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(197), pages 47-78, April – J.
    11. Maria Karmeliuk & Martin G. Kocher & Georg Schmidt, 2022. "Teams and individuals in standard auction formats: decisions and emotions," Experimental Economics, Springer;Economic Science Association, vol. 25(5), pages 1327-1348, November.
    12. Matthias Sutter & Martin Kocher & Sabine Strauß, "undated". "Individuals and teams in UMTS-license auctions," Working Papers 2007-23, Faculty of Economics and Statistics, Universität Innsbruck.
    13. Croson, Rachel & Gächter, Simon, 2010. "The science of experimental economics," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 122-131, January.
    14. Katerina Sherstyuk & Nina Karmanskaya & Pavel Teslia, 2016. "Bidding with money or action plans? Asset allocation under strategic uncertainty," Working Papers 201603, University of Hawaii at Manoa, Department of Economics.
    15. Stefan Seifert & Karl‐Martin Ehrhart, 2005. "Design of the 3G Spectrum Auctions in the UK and Germany: An Experimental Investigation," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 229-248, May.
    16. Becker, Jan U. & Clement, Michel & Nöth, Markus, 2016. "Start-ups, incumbents, and the effects of takeover competition," Journal of Business Research, Elsevier, vol. 69(12), pages 5925-5933.
    17. Ken Binmore & Paul Klemperer, 2002. "The Biggest Auction Ever: the Sale of the British 3G Telecom Licences," Economic Journal, Royal Economic Society, vol. 112(478), pages C74-C96, March.

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    More about this item

    Keywords

    Spectrum auctions; UMTS; experiments;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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