American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Ownership Concentration and Strategic Supply Reduction
American Economic Review
vol. 115,
no. 3, March 2025
(pp. 903–44)
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 inventive 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.Citation
Doraszelski, Ulrich, Katja Seim, Michael Sinkinson, and Peichun Wang. 2025. "Ownership Concentration and Strategic Supply Reduction." American Economic Review 115 (3): 903–44. DOI: 10.1257/aer.20162018Additional Materials
JEL Classification
- D44 Auctions
- D47 Market Design
- H82 Governmental Property
- L13 Oligopoly and Other Imperfect Markets
- L82 Entertainment; Media
- L88 Industry Studies: Services: Government Policy