IP: auction rigging --- msnbc story

[David Farber <farber () cis upenn edu>]

<bold>=A0 Several high-profile federal airwave auctions over the past three
years appear to have been widely manipulated by companies using intricate
bid-signaling techniques, MSNBC has learned.


=A0 =A0 =A0 =A0 Interviews with auction participants and their advisers, and=
 a
review of hundreds of bidding records by MSNBC, indicate companies
commonly telegraphed their bidding strategies to one another. The
practice is more widespread than originally reported last week, when the
Justice Department confirmed that it had launched a probe of one Federal
Communications Commission auction of wireless licenses. <<Picture>


In disarmament talks and auctions, gaming theory gains popularity=20




=A0 =A0 =A0 =A0 Whether bid signaling is illegal is still to be determined, =
but
what seems indisputable is that it happened on a large scale and that
most of the companies participating in the auctions were aware it was
taking place. Indeed, bid signaling is considered a valid practice in
game theory, a business strategy the government embraced when it
announced it was going to auction the public airwave spectrum.


=A0 =A0 =A0 =A0 Bid signaling strategies were =93extremely common, accepted =
and
well known,=94 says Daniel Riker, chief executive officer of Pocket
Communications, which was the second-largest bidder in the so-called
C-block auctions, committing $1.4 billion for licenses in 43 major
markets. Overall, the hotly contested C-block auctions, which were
reserved for small and minority-owned businesses, raised a staggering
$10.2 billion.=20




...




see http://www.msnbc.com/news/73393.asp for the full article</bold>