An economic perspective on auctions

An efficient as cending-bid auction for multiple objects

Philippe Jehiel () and Benny Moldovanu ()

Economic Policy, 2003, vol. 18, issue 36, 269-308

Abstract: The recent spectrum auctions in Europe have shown that serious problems can arise in auctions where multiple complementary objects are being sold (such as blocks of radio spectrum) that will subsequently be used by the winning bidders to compete against each other in downstream markets. Other important instances of such situations include take-off and landing slots at airports and rights for electricity and gas transmission. We first review some of the theory describing multi-object auctions. We next outline the importance of strategic effects arising in auctions that are followed by competition between the bidders, and the tension arising between various goals such as efficiency and revenue maximization. Although more flexible auction formats can have virtues (particularly in taking into account complementarities), they can also be manipulated by bidders to build market power to the detriment of consumers. We next apply these insights to the recent European UMTS licence auctions. Finally we draw the main conclusions and policy implications.— Philippe Jehiel and Benny Moldovanu

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (41)

Downloads: (external link)
http://hdl.handle.net/10.1111/1468-0327.00107 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ecpoli:v:18:y:2003:i:36:p:269-308.

Access Statistics for this article

Economic Policy is currently edited by Ghazala Azmat, Roberto Galbiati, Isabelle Mejean and Moritz Schularick

More articles in Economic Policy from CEPR, CESifo, Sciences Po Contact information at EDIRC., CES Contact information at EDIRC., MSH Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().