Abstract
This paper empirically compares a number of market outcomes that result from two different allocation mechanisms, auctions and beauty contests, of the frequency spectrum of third generation (3G) mobile phones. The market outcomes analyzed include: penetration rate of 3G mobile phones, total mobile phones penetration rate, the ratio of 3G mobile phone users to total mobile phone users, service charge, number of operators, spectrum quantity offered and the Herfindahl-Hirschman Index of the total mobile phones and 3G mobile phones market. For our study, we employed novel biased corrected matching estimators for average treatment effects. Our results show that countries that held auctions have a lower penetration rate of third generation mobile phones, which may be due to weaker market competition.
