TY  - JOUR
AU  - Bajari,Patrick
AU  - Fox,Jeremy T.
TI  - Complementarities and Collusion in an FCC Spectrum Auction
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11671
PY  - 2005
Y2  - October 2005
UR  - http://www.nber.org/papers/w11671
L1  - http://www.nber.org/papers/w11671.pdf
N1  - Author contact info:
Patrick Bajari
Professor of Economics
University of Minnesota
4-101 Hanson Hall
1925 4th Street South
Minneapolis, MN 55455
Tel: 612/625-8369
Fax: 612/624-0209
E-Mail: bajari@econ.umn.edu

Jeremy Fox
Department of Economics
University of Chicago
1126 East 59th Street
Chicago, IL 60637
Tel: 773/702-4862
Fax: 773/702-8490
E-Mail: fox@uchicago.edu
M2  - featured in NBER digest on 2005-10-03
AB  - We empirically study bidding in the C Block of the US mobile phone spectrum auctions. Spectrum auctions are conducted using a simultaneous ascending auction design that allows bidders to assemble packages of licenses with geographic complementarities. While this auction design allows the market to find complementarities, the auction might also result in an inefficient equilibrium. In addition, these auctions have equilibria where implicit collusion is sustained through threats of bidding wars. We estimate a structural model in order to test for the presence of complementarities and implicit collusion. The estimation strategy is valid under a wide variety of alternative assumptions about equilibrium in these auctions and is robust to potentially important forms of unobserved heterogeneity. We make suggestions about the design of future spectrum auctions.
ER  -