Seminar: gaming in Combinatorial Clock Auctions

Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Maarten Janssen (Univ. Vienna)

Discussant: Gijsbert Zwart (CPB)

Language: English

Registration:  Please register by sending an email to seminars@cpb.nl.

Abstract subject In recent years, Combinatorial Clock Auctions (CCAs) have been used around the world to allocate frequency spectrum for mobile telecom licenses. CCAs are used with the promise they significantly reduce the scope for gaming (not bidding according to value). In this paper, we show, however, that CCAs significantly enhance the possibilities for strategic bidding. Real bidders in telecom markets are not only interested in the spectrum they win themselves and the price they pay for that, but also in the spectrum allocation of competitors and the price the competitors pay for that spectrum. Moreover, budget constraints play an important role. When these considerations are taken into account, CCAs provide bidders with significant gaming possibilities, possibly resulting in problems associated with multiple equilibria, highly inefficient outcomes and bankruptcy (given optimal bidding strategies).

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