Theory, experiment and the federal communications commission spectrum auctions

Banks, Jeffrey S.; Olson, Mark A.; Porter, David; Rassenti, Stephen; Smith, Vernon L.

doi:10.1016/s0167-2681(02)00149-x

Cited by 133 publications

(89 citation statements)

References 29 publications

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“…One strand of literature on spectrum auctions tries to analyze and explain specific strategic situations, as they occured in particular auctions either gametheoretically, experimentally, or based on data from the field (Klemperer, 2002;Ewerhart and Moldovanu, 2003;Bajari and Yeo, 2009). Another strand analyzes the mechanisms used in spectrum auctions based on related settings in the lab (Abbink et al, 2005;Banks et al, 2003;Seifert and Ehrhart, 2005). For example, Abbink et al (2005) found differences in results between experiments with experienced vs. inexperienced students.…”

Section: Related Literaturementioning

confidence: 99%

Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs

2013

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For many years the Simultaneous Multi-Round Auction (SMRA) has been the primary auction design for spectrum sales worldwide. Recently, the core-selecting Combinatorial Clock Auction (CCA) has been used as an alternative to the SMRA in a number of countries promising strong incentives for truthful bidding and high efficiency as a result. We analyze the efficiency and auctioneer revenue of the CCA in comparison to SMRA and examine bidding behavior in both formats. The experiments are based on two value models, which resemble single-and multiband spectrum sales in the field. Such applications often allow for thousands of possible bundles. Bidders in the CCA submitted bids for only a fraction of all bundles with a positive valuation. Bundles were selected based on synergies and payoff after the primary bid rounds. As a consequence, we found efficiency of the CCA to be significantly lower than that of SMRA in the multi-band value model and auctioneer revenue of the CCA to be lower in both value models. In addition, we characterize several properties of the auction format, which result from the two-stage design and the payment and activity rules.

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Section: Related Literaturementioning

confidence: 99%

Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs

2013

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“…Instead, it uses a clock to quote successive prices, and each bidder is required only to indicate his quantity demanded at the standing price. (McCabe et al, 1988(McCabe et al, /1991also see: McCabe et al, 1990;Cramton and Kerr, 2002;Porter et al, 2003;and Banks et al, 2003 who discuss the chaotic problems created in the absence of an English clock auction).…”

Section: Clock Auctionsmentioning

confidence: 99%

The design, testing and implementation of Virginia’s NOx allowance auction

Porter

Rassenti

Shobe

et al. 2009

Journal of Economic Behavior & Organization

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“…Thus, despite their complexity, combinatorial auctions are becoming an essential tool when it comes to awarding multiple heterogeneous lots, particularly in the allocation of radio spectrum licenses (see Banks et al, 2003;Plott and Salmon, 2004, among others). When designing combinatorial auctions, as in any auction, it is essential to achieve an efficient allocation and fair payments.…”

Section: Introductionmentioning

confidence: 99%

Exploring pricing rules in combinatorial sealed-bid auctions

Mochón

Sáez

Gómez-Barroso

et al. 2012

Journal of Economic Behavior & Organization

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JEL classification: C630 C730 D440Keywords: Core-selecting package auctions Pricing rule Co-evolutionary system Agent-based model Radio spectrum a b s t r a c tThe allocation of public goods such as the radio spectrum is a difficult task that the government must face. Currently, auctions are becoming an important tool to deal with this duty. In this context, the rules that the auctioneer establishes are particularly relevant, as the final outcome depends on them. When auctioning many related items, such as spectrum licenses, the bidders' values for one item may depend on the number of items already obtained (complements and substitutes items). In such circumstances, combinatorial auctions are the most appropriate alternative for allocating lots. This paper analyzes the implications of selecting a particular pricing mechanism on the final result in a combinatorial sealed-bid auction. The following pricing rules are selected: the first-price mechanism, the Vickrey-Clarke-Groves (VCG) mechanism, and the bidder-Pareto-optimal (BPO) core mechanism, a core-selecting auction. To test these pricing rules, a simulator of the auction model has been developed. Then, to tackle the complex problem of simulating bidders' behavior, a co-evolutionary system has been designed to identify improved strategies. The results revealed that the first-price mechanism yields inefficient outcomes and a notable reduction in the seller's revenues. Both the VCG and BPO mechanisms yield outcomes that are closer to the efficient allocation, and differences in revenues are affected by the presence of asymmetries.

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Theory, experiment and the federal communications commission spectrum auctions

Cited by 133 publications

References 29 publications

Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs

Do core-selecting Combinatorial Clock Auctions always lead to high efficiency? An experimental analysis of spectrum auction designs

The design, testing and implementation of Virginia’s NOx allowance auction

Exploring pricing rules in combinatorial sealed-bid auctions

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