ESRC Centre for Economic Learning and Social Evolution
Abstract
We survey the recent European UMTS license auctions and compare
their outcomes with the predictions of a simple model that emphasizes future
market structure as a main determinant of valuations for licenses. Since the
main goal of most spectrum allocation procedures is economic efficiency, and
since consumers (who are affected by the ensuing market structure) do not
participate at the auction stage, good designs must alleviate the asymmetry
among incumbents and potential entrants by actively encouraging entry
