Raising rivals' cost in multi-unit auctions
- Author(s)
- Maarten Janssen, Vladimir Karamychev
- Abstract
The objective many telecom regulators want to achieve when they decide to auction spectrum is that acquiring firms pay a market price (based on the opportunity cost principle). The simultaneous ascending auction may fail in this respect, as it provides bidders with an opportunity to engage in strategic demand reduction. This paper asks whether the combinatorial clock auction (CCA) fares better in this respect. We show that the answer to this question depends on the objectives bidders have. If bidders have only the slightest preference to raise rivals’ cost, they will use the opportunities the CCA provides them to engage in strategic demand expansion. This is even the case when the clock phase ends with excess demand.
- Organisation(s)
- Department of Economics
- External organisation(s)
- Erasmus University Rotterdam
- Journal
- International Journal of Industrial Organization
- Volume
- 50
- Pages
- 473–490
- No. of pages
- 18
- ISSN
- 0167-7187
- DOI
- https://doi.org/10.1016/j.ijindorg.2016.04.011
- Publication date
- 05-2016
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Aerospace Engineering, Economics and Econometrics, Economics, Econometrics and Finance (miscellaneous), Industrial relations, Industrial and Manufacturing Engineering, Strategy and Management
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/raising-rivals-cost-in-multiunit-auctions(309137d2-c133-40ac-b2a0-f6bbc5cf598b).html