Book contents
- Frontmatter
- Contents
- Preface
- Acknowledgments
- Introduction
- PART I RATIONALITY, MARKETS, AND INSTITUTIONS
- PART II IMPERSONAL EXCHANGE: THE EXTENDED ORDER OF THE MARKET
- 3 Relating the Two Concepts of a Rational Order
- 4 Market Institutions and Performance
- 5 Asymmetric Information and Equilibrium without Process
- 6 FCC Spectrum Auctions and Combinatorial Designs: Theory and Experiment
- 7 Psychology and Markets
- 8 What Is Rationality?
- PART III PERSONAL EXCHANGE: THE EXTERNAL ORDER OF SOCIAL EXCHANGE
- PART IV ORDER AND RATIONALITY IN METHOD AND MIND
- References
- Index
6 - FCC Spectrum Auctions and Combinatorial Designs: Theory and Experiment
Published online by Cambridge University Press: 18 May 2010
- Frontmatter
- Contents
- Preface
- Acknowledgments
- Introduction
- PART I RATIONALITY, MARKETS, AND INSTITUTIONS
- PART II IMPERSONAL EXCHANGE: THE EXTENDED ORDER OF THE MARKET
- 3 Relating the Two Concepts of a Rational Order
- 4 Market Institutions and Performance
- 5 Asymmetric Information and Equilibrium without Process
- 6 FCC Spectrum Auctions and Combinatorial Designs: Theory and Experiment
- 7 Psychology and Markets
- 8 What Is Rationality?
- PART III PERSONAL EXCHANGE: THE EXTERNAL ORDER OF SOCIAL EXCHANGE
- PART IV ORDER AND RATIONALITY IN METHOD AND MIND
- References
- Index
Summary
The best-laid schemes o' mice an' men Gang aft agley An' lea'e us nought but grief an' pain For promis'd joy.
Robert BurnsIntroduction
In this chapter, I discuss a case study in the constructivist design of a seller's auction mechanism, the use of both laboratory experiments and the field to test-bed those designs to determine their ecological fitness, and their modification in the light of that experience. In the 1990s, a series of Federal Communications Commission (FCC) auctions led to numerous changes in the auction rules with many instructive parallels to the earlier laboratory learning, but at far higher cost. Moreover, the FCC design contained flaws arising from several interdependent assumptions that from the beginning were never critically examined and studied empirically: a common value environment, revenue maximization as the criterion for auction design that in turn implied the English auction format, and the public revelation of complete information on who was bidding how much for what in real time.
Following a series of spectrum auctions, the U.S. Congress mandated an independent evaluation of the Simultaneous Multiple Round (SMR) auction mechanism that had been developed by the FCC to award licenses to bidders. This evaluation was required to include an experimental study that would increase understanding of the problems and the complexities of the SMR mechanism. The study was also to examine alternatives to the SMR that might better facilitate the acquisition of efficient combinations of the elementary licenses where some of those elements are complements.
- Type
- Chapter
- Information
- Rationality in EconomicsConstructivist and Ecological Forms, pp. 115 - 148Publisher: Cambridge University PressPrint publication year: 2007