Preferred bidders, curse in a simultaneous ascending auction

Economics

Further details

In this paper we try shedding light on the two popular questions on spectrum licensing auctions : [1] whether any geographical synergies between licences can be detected, and if so, what would be possible alternatives and pros and cons thereof, and [2] whether the provision of entrants-only licences truly serve to protect new (hence less established) entrants and encourage their participation. Our empirical analysis on [1] is mixed and inconclusive, leaving some concerns on the broadly adopted auction mechanism that ignores any potential synergistic interlink between geographically adjacent licences. The Australian data also serves to cast a fresh doubt against [2], which we follow up by a simple theoretical discussion.