A stylized model of the German UMTS auction


Moldovanu, Benny ; Ewerhart, Christian


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URL: http://ub-madoc.bib.uni-mannheim.de/2794
URN: urn:nbn:de:bsz:180-madoc-27940
Document Type: Working paper
Year of publication: 2002
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series: Sonderforschungsbereich 504 > Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung (Laufzeit 1997 - 2008)
Subject: 330 Economics
Classification: JEL: H21 D44 ,
Subject headings (SWD): Deutschland , Mobile Telekommunikation , Konzession , Lizenzvergabe , Auktionstheorie
Abstract: This paper discusses some economic aspects of the recent German and Austrian UMTS license auctions. We consider a stylized model of the open ascending auction with incomplete information and market externalities. It is shown that, if the dominant incumbent is not successful in pushing the weakest entrant out of the market, he will face ex-post spurious price increments. We argue that this feature of the German auction design caused a significant risk for the bidding firms. In particular, being aware of these risks, an incumbent may be willing to accommodate the entrant earlier than what one would expect from the valuations alone. We compare our predictions with the observed outcomes.
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Moldovanu, Benny ; Ewerhart, Christian (2002) A stylized model of the German UMTS auction. Open Access [Working paper]
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