The idea of setting essays is to offer you the chance to make a longer, more complex argument. In each paragraph, a flow of main idea thesis explanation / reasoning justification evidence / example support is an excellent structure to use. If you read through academic writing, you will find this structure over and over. There are of course other structures, however this one always works and makes you sound concise and clear. The 'lse' essay structure can be described as 'say what you're going to say intro , say it in detail main body , say what you've said conclusion '. Also, if you think about the executive summary, background, analysis and conclusions / recommendations sections of a business report, you can see that a similar structure holds.

Bearing the above in mind, decide which one makes the clearer argument and which, therefore, got the higher mark. in the year 20, there were auctions of spectrum rights for third generation mobile telephones in several european countries. These auctions generated very different amount of revenue in different countries. How can this be explained? auction theory as a very useful brunch of game theory is of the great interest of modern economists. Among other reasons of its popularity stands direct importance of its ideas to modern businesses and governments. Nowadays any business sector is more or less competitive, which requires all it's participants to be dynamic and creative.

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Governments, as owners of resources that allow businesses to expand and modernize, are always ready to sell those resources as it will eventually help businesses and certainly bring revenues. The best way for government to sell available resources is to declare an auction. Modern auction theory is a very powerful tool for designing auctions of very profitable kind. Proper auction design will rise maximum amount of money for the government and provide companies with resources they need.

However actions that maximize profits for the government have a direct influence also on the life of the citizens, as dixit puts it: . Because of significant contributions the budget, auctions affect important macroeconomic magnitudes, such as interest rates. So, auctions held by government, and to be more specific properly designed actions directly influence the life of modern country. In this essay i would like to make a kind of short review of auctions of spectrum rights for third generation mobile phones held in europe in year 20. The peculiarity of these auctions lies in the fact that revenues that were generated by european governments are different as a result of differently designed actions they held.

This fact allows as to trace features of the auctions that were successful and resulted in relatively high revenues for the government. Let's start with united kingdom as it was the first country to hold such kind of auctions. Strategy that united kingdom had chosen was selling 5 licenses during classical ascending auction.

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Firstly it should be said that auctions as any normal business activity should be competitive in order to be effective. Participants were not completely aware of the usefulness of 3g cell phones, but were eager to get competitive advantage in the new generation mobile communication technology. This fact attracted new entrants, since at least one of the licenses can be potentially won by new entrants to the market. Both this facts generated highly competitive auction environment and limited possible collusions. When auction were run there were 5 major phone operators for 5 licenses to be sold. Few entrants decided to participate in the auction, since everybody was sure that 5 licenses will be distributed among market leaders. Another factor that made things even worse was the fact that that was an ascending auction.

In this case with few participants there is a risk of collusion among market leaders. Netherlands would have generated much more money if they would some how encourage competition and change the action design in such a way that it would be possible for participants other than market leaders to place bids independently of each other to reduce collusion sealed bid. Italy intentionally reduced amount of participants by imposing a requirements that participant of the auction must satisfy. Such situation combined with the fact that italian auction was ascending could result in possible collusions among competitors. Here amount of participants was also artificially limited by allowing participants to join into the groups. Number of participants was sufficient to run profitable auction, but combination of officially permitted collusions and low reserve price resulted in absolutely insufficient revenues.

Number of participants in both countries' auctions was low, which means that there were risks of collusion. Both countries sold licenses in blocks, allowing number of winners be determined by bidders. Germany and austria generated 615 and 100 euros per capita in revenue respectively.

Germany designed auction in such a way that bids of two main market players were rationalized in a way that it resulted in high revenues. Generally, the main difference in revenues generated from spectrum rights auctions can be explained by the difference in chosen auction design. Countries that tried to facilitate competitive bidding and limited the possibilities of collusion enjoyed high revenues. Klemperer say that what really matters in auction design is robustness against collusion and attractiveness to entry. Exactly the combination or lack of one of this factors resulted in the difference in the revenues generated by european countries. Any country that wants to increase revenues from auction must try to facilitate the competition among bidders by trying to make participation in auction as attractive as possible and eliminating any barriers for participation.

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There should be no cooperation between participants, as it will result in lower bids and as a consequence in low revenues. Countries should not choose auction design that facilitates collusion, as ascending auction in our case. Of course there are several other reasons for difference in revenues, among them there is a fact that uk as a country that run the first spectrum rights auction in the world, might have enjoyed high revenues simply because participants were new to the licenses and had no idea of their true value. Overall economic situations in the counties as well as political might also result in differences in revenues.

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But the main reason for difference in profitability of the spectrum licenses auctions is difference in auction designs which were effective in some countries and not in the others. 2nd edition, norton, 2004 paul klemperer, auctions: theory and practice electronic version of book on in the year 20, there were auctions of spectrum rights for third generation mobile telephones in several european countries. How can this be explained? in the year 20, european auctions of 3g mobile telecommunication licenses raised over 100 billion euros in government revenues.

The countries that participated were united kingdom, netherlands, italy, switzerland, germany and austria. There was a big differential between revenues raised in each country with united kingdom leading at 650 euros per capita and switzerland coming in last at 20 euros per capita. The reasons for this big discrepancy in revenues is likely due to poor auction designs and the sequence in which the auctions took place. When it comes to auction design, the two crucial components are attracting entry and preventing collusion.