Bachelor's thesis (@Technical University Munich): simulation of the German spectrum auction from 2015 "Mobiles Breitband - Projekt 2016"
Abstract
With specific implementations varying world wide, characteristically spectrum auctions comprise of many licenses being auctioned simultaneously. Allowing bidders to submit bids only on single items such as in the well established Simultaneous Multi-Round Action (SMRA), acquiring certain combinations of complementing objects can arise in strategical problems for bidders. Combinatorial auctions try to mitigate this effect by allowing bids on bundles of items, but computational challenges emerge due to possible allocations being in combinatorial magnitude with growing number of items being offered. To reduce computational effort, Hierarchical Package Bidding (HPB) was introduced which arranges items in a hierarchical tree structure. The effort of this thesis is to explore indications of the eligibility of HPB in the context of spectrums auctions by running simulations of the SMRA and HPB auction formats based on the German spectrum auction of 2015. The results indicate, that HPB might be helpful in enabling bidders to find more efficient overall allocations when choosing an appropriate bidding hierarchy. This improvement came with the reduction of overall revenue as bidder signalling improved. SMRA was superior when a less competitive HPB hierarchy was used, indicating that choosing a suitable hierarchy is key to the success of the auction.
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