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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