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Full-Text Articles in Economic Theory
Expert Affidavit Of Peter Cramton, Peter Cramton
Expert Affidavit Of Peter Cramton, Peter Cramton
Peter Cramton
Comments on the impact of a delayed sale of spectrum license by Pacific Communication. For American Wireless.
Lessons From The United States Spectrum Auctions, Peter Cramton
Lessons From The United States Spectrum Auctions, Peter Cramton
Peter Cramton
No abstract provided.
Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams
Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams
Peter Cramton
Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values …
The Efficiency Of The Fcc Spectrum Auctions, Peter Cramton
The Efficiency Of The Fcc Spectrum Auctions, Peter Cramton
Peter Cramton
From July 1994 to July 1996, the Federal Communications Commission (FCC) conducted nine spectrum auctions, raising about $20 billion for the U.S. Treasury. The auctions assigned thousands of licenses to hundreds of firms. Were the auctions efficient? Did they award the licenses to the firms best able to turn the spectrum into valuable services for consumers? There is substantial evidence that the FCC's simultaneous ascending auction worked well. It raised large revenues. It revealed critical information in the process of bidding and gave bidders the flexibility to adjust strategies in response to new information. As a result, similar licenses sold …
Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams
Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams
Peter Cramton
Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values …
Ascending Auctions, Peter Cramton
Ascending Auctions, Peter Cramton
Peter Cramton
A key question of auction design is whether to use an ascending-bid or a sealed-bid format. The critical distinction between formats is that an ascending auction provides the bidders with information through the process of bidding. This information is a two-edged sword. It may stimulate competition by creating a reliable process of price discovery, by reducing the winner’s curse, and by allowing efficient aggregations of items. Alternatively, the information may be used by bidders to establish and enforce collusive outcomes. Ex ante asymmetries and weak competition favor a sealed-bid design. In other cases, an ascending auction is likely to perform …
Simultaneous Ascending Auctions With Package Bidding, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Simultaneous Ascending Auctions With Package Bidding, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Peter Cramton
An effective package bidding mechanism addresses three problems: the exposure problem (the risks a bidder faces in trying to construct an efficiently large combination of licenses), the free-rider problem (the difficulties small bidders have in beating those who bid for larger packages of licenses), and the computational complexity problem (which arises from the fact that the number of possible combinations of licenses is much larger than the number of licenses). Package bidding offers the possibility of an improvement over individual-license bidding only when there are strong complementarities and the pattern of those complementarities varies across bidders. Package bidding works satisfactorily …
Package Bidding For Spectrum Licenses, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Package Bidding For Spectrum Licenses, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Peter Cramton
The FCC was an innovator in adopting the rules of the simultaneous ascending-price auction for its sales of spectrum licenses. While these rules have performed well in the auctions conducted so far (and would perform even better with the design improvements suggested in our first report), there are two inherent limitations in any design that seeks to assign and price the licenses individually. First, such designs create strategic incentives for bidders interested in multiple licenses that are substitutes to reduce their demands for some of the licenses in order to reduce the final prices of the others; this is the …
Auction Design Enhancements For Non-Combinatorial Auctions, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Auction Design Enhancements For Non-Combinatorial Auctions, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Peter Cramton
We evaluate a number of possible enhancements to the FCC auctions. We consider only changes to the current auction rules that stay within the basic format of the simultaneous multiple round auction for individual licenses. This report summarizes and extends our e-mail exchanges with FCC staff on this topic. A subsequent report will cover auctions with combination bids. Overall, the FCC spectrum auctions have been an enormous success. However, there are two design goals in the auction where important improvement can be achieved within the basic rules structure. These are restricting collusion among bidders and reducing the time taken to …
Reply Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Reply Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Peter Cramton
For Antigone and Devco.
Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Peter Cramton
For Antigone and Devco.
The Fcc Spectrum Auctions: An Early Assessment, Peter Cramton
The Fcc Spectrum Auctions: An Early Assessment, Peter Cramton
Peter Cramton
This paper analyzes six spectrum auctions conducted by the Federal Communications Commission (FCC) from July 1994 to May 1996. These auctions were simultaneous multiple-round auctions in which collections of licenses were auctioned simultaneously. This auction form proved remarkably successful. Similar items sold for similar prices and bidders successfully formed efficient aggregations of licenses. Bidding behavior differed substantially in the auctions. The extent of bidder competition and price uncertainty played an important role in determining behavior. Bidding credits and installment payments also played a major role in several of the auctions.
Synergies In Wireless Telephony: Evidence From The Broadband Pcs Auctions, Peter Cramton, Lawrence M. Ausubel, R. Preston Mcafee, John Mcmillan
Synergies In Wireless Telephony: Evidence From The Broadband Pcs Auctions, Peter Cramton, Lawrence M. Ausubel, R. Preston Mcafee, John Mcmillan
Peter Cramton
We examine bid data from the first two broadband PCS spectrum auctions for evidence of value synergies. First, we estimate a benchmark regression for the determinants of final auction prices. Then, we include variables reflecting the extent to which bidders ultimately won or already owned the adjacent wireless properties. Consistent with geographic synergies in an ascending-bid auction, prices were higher when the highest-losing bidder had adjacent licenses. The footprints of winning bidders suggest that they were often successful in realizing these synergies.
Deficit Reduction Through Diversity: How Affirmative Action At The Fcc Increased Auction Competition, Peter Cramton, Ian Ayres
Deficit Reduction Through Diversity: How Affirmative Action At The Fcc Increased Auction Competition, Peter Cramton, Ian Ayres
Peter Cramton
In recent auctions for paging licenses, the Federal Communications Commission has granted businesses owned by minorities and women substantial bidding credits. In this article, Professors Ayres and Cramton analyze a particular auction and argue that the affirmative action bidding preferences, by increasing competition among auction participants, increased the government’s revenue by $45 million. Subsidizing the participation of new bidders can induce established bidders to bid more aggressively. The authors conclude that this revenue-enhancing effect does not provide a sufficient constitutional justification for affirmative action—but when such justification is independently present, affirmative actions can cost the government much less than is …
The Case For Affirmative Auction: From Conscience To Coffers, Ian Ayres, Peter Cramton
The Case For Affirmative Auction: From Conscience To Coffers, Ian Ayres, Peter Cramton
Peter Cramton
The Federal Communications Commission’s auction of wireless communication licenses last fall has been criticized as a huge Government giveaway because of the substantial bidding preferences granted to women and minorities. In March, Federal court action delayed the FCC’s June auction until August to consider the legality of similar preferences. But far from being a giveaway, affirmative action actually increased the total amount paid to the Government by about $15 million. Women and minority bidders were granted a 40 percent bidding credit on certain licenses and the right to pay the Government in installments over 10 years at a favorable rate. …
Money Out Of Thin Air: The Nationwide Narrowband Pcs Auction, Peter Cramton
Money Out Of Thin Air: The Nationwide Narrowband Pcs Auction, Peter Cramton
Peter Cramton
The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple-round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success—an excellent example of bringing economic theory to bear on practical problems of …