Low Price Equilibrium in Multi-Unit Auctions: The GSM Spectrum Auction in Germany

The second-generation GSM spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid auction.The present paper gives an account of the events, describes the auction rules and market conditions, and provides a theoretical explanation of low price equilibria in simultaneous, ascending-bid auctions.In particular it is shown that the low price equilibrium that implements the efficient allocation is the unique perfect equilibrium of that game.