Welcome to the new version of CaltechAUTHORS. Login is currently restricted to library staff. If you notice any issues, please email coda@library.caltech.edu
Published August 21, 2017 | Submitted
Report Open

Mutually Destructive Bidding: The FCC Auction Design Problem

Abstract

Dissatisfaction with previous assignment mechanisms and the desire to raise revenue induced Congress to grant the FCC authority to auction radio licenses. The debate over an appropriate auction design was wide ranging with many imaginative proposals. Many of the arguments and their scientific support are unfortunately not publicly available. Here, we present our side of this debate for the record. Synergies across license valuations complicate the auction design process. Theory suggests that a "simple" (i.e., non-combinatorial) auction will have difficulty in assigning licenses efficiently in such an environment. This difficulty increases with increases in "fitting complexity." In some environments, bidding may become "mutually destructive." Experiments indicate that a combinatorial auction is superior to a simple auction in terms of economic efficiency and revenue generation in bidding environments with a low amount of fitting complexity. Concerns that a combinatorial auction will cause a "threshold" problem are not borne out when bidders for small packages can communicate.

Additional Information

Revised version. Original dated to January 1995. Published as Bykowsky, Mark M., Robert J. Cull, and John O. Ledyard. "Mutually destructive bidding: The FCC auction design problem." Journal of Regulatory Economics 17, no. 3 (2000): 205-228.

Attached Files

Submitted - sswp916_-_revised.pdf

Files

sswp916_-_revised.pdf
Files (93.9 kB)
Name Size Download all
md5:9b82d8d1f0ff9b779c489848b8d973b7
93.9 kB Preview Download

Additional details

Created:
August 19, 2023
Modified:
January 14, 2024