17/11/2016
The Bottom Line
BBC
4.6 • 606 Ratings
🗓️ 17 November 2016
⏱️ 28 minutes
🧾️ Download transcript
Summary
If the word auction conjures up pictures of a man with a gavel in a packed room shouting 'going, going, gone' - think again. These days governments and businesses rely on complicated online auctions to buy and sell. Auctions are also the preferred mechanism for the allocation of radio spectrum licences to mobile phone companies and the selling of mineral rights. Auctions come in a huge variety of forms, and the precise design can have a dramatic effect on the outcomes. Do you know a sealed bid from a "combinatorial clock" auction? Evan Davis and guests discuss the business of auctions.
Guests include: Dan Maldoom, DotEcon Samantha Collett property developer Stephen Lerner, 3 UK
Producer: Lesley McAlpine.
Transcript
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| 0:00.0 | Thank you for downloading this programme. In this edition of the bottom line, we're looking at |
| 0:04.1 | auctions and the variety in which they come. Hello and welcome to the programme. If for you, |
| 0:10.8 | the word auction conjures up pictures of a man with a gavel shouting, going, going, gone, |
| 0:16.2 | at a room full of people surrounded by antiques, listen on, because we are going to talk about |
| 0:20.5 | auctions |
| 0:21.0 | today in their full glory. The auction is a far more important form of market than you probably |
| 0:27.3 | realise. From bidding on eBay to the selling of mineral rights to the allocation of government |
| 0:31.8 | debt, auctions are often the preferred mechanism, and they come in a huge variety of forms. |
| 0:38.2 | In fact, the precise design of auction can have a dramatic effect on the outcomes. |
| 0:43.1 | So we'll get some theory and practice of this all-important device. |
| 0:47.6 | And let's meet my three guests who have a fair bit of experience in this field. |
| 0:52.0 | And first of all, Dan Maldum, who's an economist, co-founder of Dot Econ Limited, |
| 0:57.4 | it's a business consultancy, that designs auction. |
| 1:00.3 | So, Dan, just tell me about your background and how you got into this. |
| 1:03.1 | Oh, it's a sort of long story. |
| 1:04.6 | I started as an academic, as a microeconomist, and started doing a bit of consultancy. |
| 1:09.9 | And before I knew it, I had a phone call back in the |
| 1:12.5 | late 90s from Orange, and they were participating in the first radio spectrum auction in Europe. |
| 1:20.3 | So I didn't know much about it at that point, but as a curious economist, I thought this |
| 1:25.3 | looks rather good fun. It's been done in the US. Let's just see how this goes. So I worked a bit on bid strategy, worked with BT in the early 90s. And then since then, I've worked a lot with governments all around the world, designing auctions for radio spectrum, also in energy markets, other applications such as that. And you were involved in the design, as I understand it, of the last |
| 1:45.7 | mobile phone spectrum auction. In the UK, yes, that's right, which was 2013. 2013, so that sold a |
| 1:51.7 | couple of important bands of radio spectrum, 2.6 gigahertz, is one that keeps everybody's phones going, |
... |
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