The Economics of Auctions
Spectrum Auctions: From Milgrom to 5G
Governments auction radio spectrum to telecom firms, and the design of these auctions, pioneered by Paul Milgrom and Robert Wilson, won the 2020 Nobel Prize in Economics.
Selling the airwaves.
Why auction
Spectrum is scarce, and auctions allocate it to those who value it most.
Design
Simultaneous ascending auctions let bidders adjust across multiple licences.
Nobel
Milgrom and Wilson won in 2020 for improved auction theory and inventions of new formats.
Results
The UK’s 2000 3G auction raised about £22.5 billion, showing the stakes.
A licence bundle
Telecom firms bid for slots in several regions at once.
Assuming the highest revenue is the only goal
Coverage and competition also matter.
Key takeaways
- Spectrum is auctioned.
- Simultaneous auctions are used.
- Milgrom and Wilson won the 2020 Nobel.
- The UK 3G auction raised £22.5bn.
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