← Search

American Economic Review Vol. 115 No. 3 2025

Ownership Concentration and Strategic Supply Reduction

Ulrich Doraszelski1; Katja Seim2; Michael Sinkinson3; Peichun Wang4

1 Wharton School, University of Pennsylvania (email: ) · 2 Department of Economics and School of Management, Yale University (email: ) · 3 Kellogg School of Management, Northwestern University (email: ) · 4 HKU Business School, The University of Hong Kong (email: )

Abstract

We explore the implications of ownership concentration for the recently concluded incentive auction that repurposed spectrum from broadcast TV to mobile broadband usage in the United States. We document significant multilicense ownership of TV stations. We show that in the reverse auction, in which TV stations bid to relinquish their licenses, multilicense owners have an incentive to withhold some TV stations to drive up prices for their remaining TV stations. Using a large-scale valuation and simulation exercise, we find that this strategic supply reduction increases payouts to TV stations by between 13.5 percent and 42.4 percent. (D44, D47, H82, L13, L82, L88)

DOI
10.1257/aer.20162018
Volume
115
Issue
3
Pages
903-944
Language
en
Sources
bibtex:phds-export.bib crossref openalex

Cite