Discussion paper

DP11173 Ownership Concentration and Strategic Supply Reduction

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%.


Doraszelski, U, M Sinkinson and P Wang (2016), ‘DP11173 Ownership Concentration and Strategic Supply Reduction‘, CEPR Discussion Paper No. 11173. CEPR Press, Paris & London. https://cepr.org/publications/dp11173