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Emiel Maasland: Game Theory in Spectrum Auctions

Abstract: Auctions (in particular spectrum auctions) are considered to be the clearest success story in the application of game theory to economics. Since 1994, auction theorists have designed spectrum auctions for governments world-wide. In some of these auctions, the amount of money raised was almost beyond imagination. E.g., in 2000, the British and German governments, together, raised almost 100 billion euros for licenses for third generation mobile telecommunications. The Simultaneous Multi Round Auction (SMRA) and the Combinatorial Clock Auction (CCA) are the two most used auction formats to sell spectrum licenses nowadays. In this talk I will discuss the pros and cons of these formats, provide several SMRA and CCA real-life examples in which firms have gamed the auction, and explain which design features could be held responsible for this gaming behaviour.