Pot of gold or winner's curse? An event study of the auctions of 3G mobile telephone licences in the UK

<p>Commentators have suggested that the winning companies in the UK 3G mobile telephone auction overpaid for their licences. However, event-study method using the market model under ordinary least squares (OLS), robust and structural time-series estimation yields no systematic evidence of the Ñ·inner's curseÒ® Positive as well as negative one-day wealth effects are observed amongst both winners and losers, and there is no lasting adverse market reaction to the winners, taken as a group. We conclude there is no case for easing the regulatory stance in the industry on grounds that the winners paid too much.</p>