Bangladesh Bank Training Academy Journal

Abstract

Allocation of public resources has always been a tricky issue for national government the world over. Primarily governments used beauty contests for selling coal blocks or for allocating oil drill licences. In some countries, lotteries and first-come-first serve methods were also employed. This paper studies the pros and cons of these methods with special reference to allocation through auctions. The Simultaneous Ascending Auction design, used by the FCC for allocation of spectrum licences in the US in 1993 and later on copied in different countries, is analyzed in detail. As a case study, the recent spectrum auctions held in Bangladesh in September 2013 were studied and it was ound that the auction would have performed better if the government would have been able to attract one more bidder.