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Proc Natl Acad Sci U S A. 2017 Jul 11;114(28):7202-7209. doi: 10.1073/pnas.1701997114. Epub 2017 Jun 26.

Economics and computer science of a radio spectrum reallocation.

Author information

1
Department of Computer Science, University of British Columbia, Vancouver, BC V6T 1Z4, Canada.
2
Auctionomics, Palo Alto, CA 94301.
3
Auctionomics, Palo Alto, CA 94301; milgrom@stanford.edu.
4
Department of Economics, Stanford University, Stanford, CA 94305.

Abstract

The recent "incentive auction" of the US Federal Communications Commission was the first auction to reallocate radio frequencies between two different kinds of uses: from broadcast television to wireless Internet access. The design challenge was not just to choose market rules to govern a fixed set of potential trades but also, to determine the broadcasters' property rights, the goods to be exchanged, the quantities to be traded, the computational procedures, and even some of the performance objectives. An essential and unusual challenge was to make the auction simple enough for human participants while still ensuring that the computations would be tractable and capable of delivering nearly efficient outcomes.

KEYWORDS:

algorithmic mechanism design; auction theory; dominant strategies; incentive auction; market design

Conflict of interest statement

Conflict of interest statement: P.M. led the team of consultants on behalf of Auctionomics, which was responsible for advising the Federal Communications Commission on the design of the incentive auction. K.L.-B. and I.S. were the two other members of the Auctionomics consulting team.

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