Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87453
Authors: 
van den Berg, Vincent
Year of Publication: 
2012
Series/Report no.: 
Tinbergen Institute Discussion Paper 12-117/VIII
Abstract: 
Consider a government that auctions a franchise for, e.g., an airport, telecommunication network, or utility. Consider an 'incumbent bidder' that owns a complement or substitute. With an auction on the transfer (i.e. payment) to the government, the incumbent is advantaged.If the government regulates the market with an auction on the price asked to consumers, it depends who is advantaged. With complements, the incumbent is advantaged: it can set a lower price on the new franchise, as this increases the profit of the other. With substitutes, the incumbent is disadvantaged. In many settings, the advantage bidder always wins.
Subjects: 
Franchising
auctions
advantaged bidders
incumbent
private supply
regulatory auctions
JEL: 
D43
L13
L51
R41
R42
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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