search query: @author Naegelen, F. / total: 4
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Author: | Mougeot, M. Naegelen, F. |
Title: | Designing a market structure when firms compete for the right to serve the market |
Journal: | Journal of Industrial Economics
2005 : MAR, VOL. 53:3, p. 393-416 |
Index terms: | licensing market entry market structure sunk costs |
Language: | eng |
Abstract: | This article considers the optimal market structure when firms incur sunk cost before entering the market and when the government is not able to regulate firms in the market. It is shown that a free entry equilibrium results in an excessive entry when the entry costs are private information. An auction mechanism is presented for selecting the firms allowed to serve the market. The optimal number of licenses results in the socially optimal market structure. |
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