European 3G auctions: Using a comparative event study to search for a winner's curse

This paper seeks to identify any possible winner's curse in the European 3G licence administration processes. The existence of a winner's curse has been suggested as a reason to relax the licensing conditions and the regulatory environment. The winner's curse will be tested by comparing event studies across countries which differ in terms of licence administration procedures. If a winner's curse occurred in some auctions, we may expect a ‘winner's bounty’ for those companies obtaining licences through non-auction methods. The study finds that there is at least short-term evidence of a winner's curse.