Issue:
Telecom giants complaint before
auction started that the reserve fee too high
What is reserve fee??
The reserve fee is simply the
starting point of bidding. No bidding can be made below this price. If bidding
doesn’t push the price up then the item is sold at the reserve price. However
if the bidding intensity is high then the final price could go much higher than
the reserve price
Advantage of low reserve
price:
Lower the reserve price --> more and more bidders participation in the auction --> more extensive participation -->
more comprehensive price discovery of the resource --> more successful auction
