Laboratory Experimental Testbeds: Application to the PCS Auction

The use of laboratory experimental methods in economics has been growing rapidly. With each application, new insights are gained about how the methodology can be used to supplement the more traditional forms of research. Such was the case with the development of the Federal Communications Commission (FCC) policy for the auction of licenses for Personal Communication Systems (PCS). At several different stages the laboratory experimental methods of economics were used. The application differed at each of these stages, representing the different types of relationships that can exist among theory, observation, and policy. This paper is a brief account of the applications.