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Collusive Bidding: Lessons from the FCC Spectrum Auctions

Peter Cramton () and Jesse Schwartz ()
Additional contact information
Jesse Schwartz: Economics Department, Vanderbilt University, http://www.econ.umd.edu

Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton

Abstract: The Federal Communications Commission (FCC) spectrum auctions use a simultaneous ascending auction design. Bidders bid on numerous communication licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to bid higher on any license. With full revelation of bidding information, simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. These strategies can help bidders coordinate a division of the licenses, and enforce the proposed division by directed punishments. We examine solutions to mitigate collusive bidding in the spectrum auctions, and then apply these ideas to the design of daily electricity auctions.

Keywords: Auctions, Collusion; Multiple Object Auctions; Spectrum Auctions (search for similar items in EconPapers)
JEL-codes: D44 L12 L96 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2000-05, Revised 1999-03-09
New Economics Papers: this item is included in nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Published in Journal of Regulatory Economics, 17:1, 229-252, May 2000.

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