Assessing Economic Outcomes in Simulated Reverse Clock Auctions for Radio Spectrum

TL;DR

This paper evaluates the economic efficiency of simulated bidder behavior in FCC's reverse auction for radio spectrum, highlighting the impacts of scoring rules and feasibility checkers on costs and efficiency.

Contribution

It provides a detailed simulation analysis of the FCC's reverse auction, revealing how scoring rules and feasibility checkers influence economic outcomes and efficiency.

Findings

Reverse clock auction achieves high efficiency in isolation.

FCC scoring rule reduces total payments but slightly decreases efficiency.

Poor feasibility checkers can significantly increase costs and reduce efficiency.

Abstract

We investigate the economic outcomes that result under simulated bidder behavior in a model of the FCC's reverse auction for radio spectrum. In our simulations, limiting our notion of efficiency to the reverse auction in isolation, the reverse clock auction achieves very efficient solutions, the FCC's scoring rule greatly reduces the total payments to TV broadcasters at the cost of some efficiency, and using a poor feasibility checker can have grave consequences both in terms of the auction's cost and efficiency.