Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87459
Authors: 
van den Berg, Vincent A.C.
Year of Publication: 
2013
Series/Report no.: 
Tinbergen Institute Discussion Paper 13-117/VIII
Abstract: 
Consider a government tendering a facility, such as an airport or utility, where one bidder owns a competing facility. With a standard auction, this existing operator bids above the auctioned facility's expected profit, as winning means being a monopolist instead of a duopolist. This auction leads to an unregulated outcome which hurts welfare. A consumer-price auction can alleviate this problem. With complementing facilities, the existing operator offers a price below marginal cost and is more likely to win than other bidders; with substitutes, it is less likely to win. Often, the advantaged bidder always wins, eliminating competition for the field.
Subjects: 
Tender auction
existing operators
Advantaged bidder
Price auction
JEL: 
D43
D44
L13
L51
Document Type: 
Working Paper

Files in This Item:
File
Size
431.66 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.