An Experimental Test of Design Alternatives for the British 3G / UMTS Auction

Sector: Behavioural and experimental economics | Competition | Competition, Regulation and Business | Regulatory economics | Telecom and media
Published: January, 2002
Document type: LE publication (working papers and economic briefs) 
Tagged: quantitative analysis UK

In spring 2000, the British government auctioned off licences for Third Generation mobile telecommunications services. In the preparation of the auction, two designs involving each a hybrid of an English and a sealed-bid auction were suggested by the government: a discriminatory and a uniform price variant. We report an experiment on these two designs, and also compare the results to those with a pure English auction. Both hybrids are similar in efficiency, revenue differences disappear as bidders get experienced. Compared to the discriminatory format, the pure English auction gives new entrants better chances.