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Quote from OA

"In 2000 the British government used their help to design a special auction that sold off its 3G mobile-telecoms operating licences for a cool £22.5 billion ($35.4 billion). Their trick was to treat the auction as a game, and tweak the rules so that the best strategy for bidders was to make bullish bids (the winning bidders were less than pleased with the outcome)."

I'm thinking best price for HM Government was paid by UK customers?

C.F. quote below from [1]

"The auction confrmed our view that industrial-organisation issues are more important than the informational issues on which the auction literature has mostly focused. In particular, the problems of attracting entrants and dealing with alliances and mergers are likely to remain major preoccupations of tele-com-auction designers for the foreseeable future. Tackling such problems sensibly requires high-qualit ymarket research that keeps pace with developments in an industry that can change its clothes with bewildering rapidity. We also need more theoretical work on the industrial-organisation implications of major auctions."

(Basically the high bids lead to mergers & consolidation)

[1] http://www.nuff.ox.ac.uk/users/klemperer/biggestpaper.pdf




FYI, the design of those auctions was led by Ken Binmore [1] who is one of the current leaders in game theory, and has done similar in other countries. People may find his publications useful reading on this subject.

I know Ken, he's exactly like you might expect a leading academic but is basically amazing (and very well liked by his students).

[1] https://en.wikipedia.org/wiki/Kenneth_Binmore


I remember the auction - it delayed the intro of 4G as the big players had spent so much money on the auction that they had to sweat their 3G assets to try to recoup their costs.

It worked for the govt - it certainly didn't for the customers...




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