Working Paper: NBER ID: w23034
Authors: Ulrich Doraszelski; Katja Seim; Michael Sinkinson; Peichun Wang
Abstract: We explore the implications of ownership concentration for the recently-concluded incentive auction that re-purposed spectrum from broadcast TV to mobile broadband usage in the U.S. We document significant multi-license ownership of TV stations. We show that in the reverse auction, in which TV stations bid to relinquish their licenses, multi-license owners have an incentive to withhold some TV stations to drive up prices for their remaining TV stations. Using a large-scale valuation exercise, we find that this strategic supply reduction conservatively increases payouts to TV stations by between 7.0% and 20.7%.
Keywords: No keywords provided
JEL Codes: L10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ownership concentration (G32) | Withholding TV stations (L96) |
| Withholding TV stations (L96) | Increased payouts in the reverse auction (D44) |
| Ownership concentration (G32) | Increased payouts in the reverse auction (D44) |
| Withholding TV stations (L96) | Raised perceived value of remaining stations (H82) |
| Raised perceived value of remaining stations (H82) | Higher prices in the auction (D44) |