We study bidding and pricing competition between two spiteful mobile networkoperators (MNOs) with considering their existing spectrum holdings. Givenasymmetric-valued spectrum blocks are auctioned off to them via a first-pricesealed-bid auction, we investigate the interactions between two spiteful MNOsand users as a three-stage dynamic game and characterize the dynamic game'sequilibria. We show an asymmetric pricing structure and different market sharebetween two spiteful MNOs. Perhaps counter-intuitively, our results show thatthe MNO who acquires the less-valued spectrum block always lowers his serviceprice despite providing double-speed LTE service to users. We also show thatthe MNO who acquires the high-valued spectrum block, despite charing a higherprice, still achieves more market share than the other MNO. We further showthat the competition between two MNOs leads to some loss of their revenues. Byinvestigating a cross-over point at which the MNOs' profits are switched, itserves as the benchmark of practical auction designs.
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