A Brief Review and Analysis of Spectrum Auctions in Canada
by Martínez-Cid, Wenfei Jiao, and Zeren Zhang
Abstract
We begin by explaining the importance of efficient spectrum allocation and reviewing Canada’s recent spectrum allocation history. We then use a dataset covering more than 1,200 licenses auctioned from 2001 to 2015 that seeks to account for each auction’s particular rules. Our results confirm that measures of demand such as population covered, income levels, frequency levels, bandwidth, etc. indeed drive license valuation. We also quantify the negative impact on price of setting aside particular license auctions for new entrants, suggesting that the set-aside provision constitutes an implicit subsidy for those firms.
Michelle Connolly, Faculty Advisor
JEL Codes: D44, D45, D47, L51, O33
Structural Estimation of FCC Bidder Valuation
By Renhao Tan, Zachary Lim, and Jackie Xiao
We modify a method introduced in Fox and Bajari (2013) which structurally estimates the deterministic component of bidder valuations in FCC spectrum auctions based on a pairwise stability condition: two bidders cannot exchange two licenses in a way that increases the sum of their valuations, and we apply it to C block auctions 5, 22, 35 and 58. Our modifications improve the fit of the Fox and Bajari (2013)’s estimator especially in similar auctions involving big bidders. We find that there is evidence of significant “cross-auction” complementaries between licenses sold in a particular auction and those already owned by these endowed bidders.
Advisor: Michelle Connolly | JEL Codes: D44, D45, H82, L82
