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The Swiss UMTS spectrum auction flop: Bad luck or bad design?

  • Wolfstetter, Elmar

This paper gives an account of events, and explains some systematic reasons of the UMTS auction flop in Switzerland. Apart from general market developments, which could not have been anticipated, we argue that auction design which was introduced in England and adopted in Switzerland and elsewhere is a cause of the disappointing performance of many UMTS auctions in Europe, of which Switzerland is just one particularly pronounced example. The regulator would have been better advised to import some key ingredients of the auction design employed in Germany and Austria. This would have assured higher revenue or more competition. The paper closes with several proposals on how one should conduct future spectrum auctions.

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Paper provided by Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes in its series SFB 373 Discussion Papers with number 2001,50.

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Date of creation: 2001
Date of revision:
Handle: RePEc:zbw:sfb373:200150
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  1. Veronika Grimm & Frank Riedel & Elmar G. Wolfstetter, 2001. "The Third Generation (UMTS) Spectrum Auction in Germany," CESifo Working Paper Series 584, CESifo Group Munich.
  2. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Veronika Grimm & Frank Riedel & Elmar Wolfstetter, 2000. "Implementing Efficient Market Structure," Econometric Society World Congress 2000 Contributed Papers 0268, Econometric Society.
  4. Professor Paul Klemperer, 2000. "What Really Matters in Auction Design," Microeconomics 0004008, EconWPA.
  5. Robert J. Weber, 1997. "Making More from Less: Strategic Demand Reduction in the FCC Spectrum Auctions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 529-548, 09.
  6. 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.
  7. Michael Landsberger & Jacob Rubinstein & Elmar Wolfstetter & Shmuel Zamir, 1999. "First-Price Auctions when the Ranking of Valuations is Common Knowledge," Working Papers 99-18, Centre de Recherche en Economie et Statistique.
  8. Vijay Krishna & Motty Perry, 1997. "Efficient Mechanism Design," Game Theory and Information 9703010, EconWPA, revised 28 Apr 1998.
  9. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 413-38, July.
  10. Motty Perry & Philip J. Reny, 1999. "On The Failure of the Linkage Principle in Multi-Unit Auctions," Econometrica, Econometric Society, vol. 67(4), pages 895-900, July.
  11. Martin Feldstein, 1999. "Tax Avoidance And The Deadweight Loss Of The Income Tax," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 674-680, November.
  12. Elmar Wolfstetter & Michael Landsberger & Jakob Rubinstei & Shmuel Zamir, 1997. "First-Price Auctions when the Ranking of Valuations," Microeconomics 9701004, EconWPA.
  13. Menezes, Flavio M., 1996. "Multiple-unit English auctions," European Journal of Political Economy, Elsevier, vol. 12(4), pages 671-684, December.
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