THE BIGGEST AUCTION EVER: THE SALE OF THE BRITISH 3G TELECOM LICENCES

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Abstract

This paper reviews the part played by economists in organising the British third-generation mobile-phone licence auction that concluded on 27 April 2000. It raised £22½ billion ($34 billion or 2½% of GNP) and was widely described at the time as the biggest auction ever. We discuss the merits of auctions versus `beauty contests', the aims of the auction, the problems we faced, the auction designs we considered, and the mistakes that were made.

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