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Katja SEIM (Yale University) – "Ownership Concentration and Strategic Supply Reduction "
CREST Microeconomics Seminar :
Date: 18th November 2020
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%. With Ulrich Doraszelski, Michael Sinkinson, and Peichun Wang.
Roxana Fernandez Machado (CREST), Julien Combe (CREST), and Matias Nunez (CREST)