- Volume 3 Issue 3
Auctions are appealing market-type mechanisms because they can be deployed to solve the twin problems of resources pricing and allocation. Nonetheless the effectiveness of an auction mechanism in radio spectrum property rights should not be taken for granted. Policymakers need to be aware of the complexity of introducing market discipline in an area where none existed before. Auction design is critical to the success of the allocation process. However, a poorly designed auction mechanism can have detrimental effects on the spectrum rights allocation process. This study discusses some of the key elements and issues of auction design of radio spectrum rights for its efficient allocation. Particularly this study discusses, based on the existing auction theory and other countries' experiences, such issues as bidding rule, value interdependency and sequence of auction, information structure and asymmetric bidder, and wealth constraints and imperfect capital market.