The simultaneous, ascending auction: dynamics of price adjustment in experiments and in the UK3G spectrum auction

We develop a model of the behavior of bidders in simultaneous ascending auctions based on two principles: principle of surplus maximization and principle of bid minimization. These principles lead to models of both price dynamics and equilibration, leading to disequlibrium structural equations that can be used for estimating bidder values. The intention behind the development of this methodology is to provide an auctioneer a method of extracting information during an auction about possible closing prices. We benchmark the performance of the model with data from experimental auctions and then apply it to the UK UMTS or Third Generation Mobile Auction.