Pot of gold or winner's curse? An event study of the auctions of 3G mobile telephone licences in the UK

Cable, John, Henley, Andrew and Holland, Kevin ORCID: https://orcid.org/0000-0002-0414-2503 2002. Pot of gold or winner's curse? An event study of the auctions of 3G mobile telephone licences in the UK. Fiscal Studies 23 (4) , pp. 447-462. 10.1111/j.1475-5890.2002.tb00068.x

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Abstract

Commentators have suggested that the winning companies in the UK 3G mobile telephone auction overpaid for their licences. However, event-study method using the market model under ordinary least squares (OLS), robust and structural time-series estimation yields no systematic evidence of the ‘winner's curse’. Positive as well as negative one-day wealth effects are observed amongst both winners and losers, and there is no lasting adverse market reaction to the winners, taken as a group. We conclude there is no case for easing the regulatory stance in the industry on grounds that the winners paid too much.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Uncontrolled Keywords:	winner's curse; 3G licence auction
Publisher:	Wiley
ISSN:	0143-5671
Last Modified:	25 Oct 2022 09:09
URI:	https://orca.cardiff.ac.uk/id/eprint/57502

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