Monday, March 3, 2008 3:00 PM 315 Upson Hall **NOTE TIME AND LOCATION CHANGE** |
Theory Seminar Spring 2008 CS 789 |
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Peter Cramton |
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Spectrum Auction Design |
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Spectrum auctions are used by
governments to assign and price licenses for wireless communication. The
standard approach is the simultaneous ascending auction, in which many
related lots are auctioned simultaneously in a sequence of rounds. I
analyze the strengths and weaknesses of the approach with examples from
US spectrum auctions. I then present a variation, the package clock
auction, adopted by the UK, which addresses many of the problems of the
simultaneous ascending auction while building on its strengths. The
package clock auction is a simple dynamic auction in which bidders bid
on packages of lots. Most importantly, the pricing rule and information
policy are carefully tailored to mitigate gaming behavior. An activity
rule based on revealed preference promotes price discovery throughout
the clock stage of the auction. Truthful bidding is encouraged, which
simplifies bidding and improves efficiency. Experimental tests confirm
the advantages of the approach. I thank my collaborators, Larry Ausubel and Paul Milgrom for helpful discussions, as well as Robert Day, Evan Kwerel, Thayer Morrill, Nate Higgins, and Andrew Stocking, and the staff at Ofcom and DotEcon. I am grateful to the National Science Foundation and the Rockefeller Foundation for funding.
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