Rationalizing the UTMS spectrum bids: the case of the UK auction

This paper considers bidder behaviour in the United Kingdom’s UMTS spectrum auction. Evidence is reviewed which shows that some bidders in this auction did not bid straightforwardly in accordance with fixed valuations of the licenses. We go on to consider more speculative hypotheses about bidders’ behaviour, such as the hypotheses that bidders revised their valuations in the light of other bidders’ behaviour, or that bidders’ valuations of licenses depended on which other companies appeared likely to win a license. We find weak evidence in favor of some of these hypotheses, but no hypothesis is supported by strong direct evidence. We conclude that the rationalization of bidding in the United Kingdom’s UMTS auction remains problematic. As a consequence we are cautious regarding the success of the auction in achieving an efficient allocation of licenses

A Note on Budget Balance under Interim Participation Constraints: The Case of Independent Types

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.

Robust mechanism design and dominant strategy voting rules

We develop an analysis of voting rules that is robust in the sense that we do not make any assumption regarding voters’ knowledge about each other. In dominant strategy voting rules, voters’ behavior can be predicted uniquely without making any such assumption. However, on full domains, the only dominant strategy voting rules are random dictatorships. We show that the designer of a voting rule can achieve Pareto improvements over random dictatorship by choosing rules in which voters’ behavior can depend on their beliefs. The Pareto improvement is achieved for all possible beliefs. The mechanism that we use to demonstrate this result is simple and intuitive, and the Pareto improvement result extends to all equilibria of the mechanism that satisfy a mild refinement. We also show that the result only holds for voters’ interim expected utilities, not for their ex post expected utilities.robust mechanism design; dominant strategies; voting; Gibbard-Satterthwaite theorem