search query: @author Riordan, M. H. / total: 9
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| Author: | Riordan, M. H. Sappington, D. E. |
| Title: | Awarding monopoly franchises |
| Journal: | American Economic Review
1987 : JUN, VOL. 77:3, p.375-387 |
| Index terms: | MONOPOLY WELFARE COSTS |
| Language: | eng |
| Abstract: | Supposed that all regions initially possess the same number of residents and labor mobility is not allowed, it is explained how to award a monopoly franchise so as to maximize expected consumer's welfare. Potential producers initially possess imperfect private information about production cost, but prices exceed realized marginal cost. These ex post distortions foster more competitive bidding ex ante. The distortions for any bid-cost pair are invariant to the number of bidders (n), though, expected distortions and profits decline with n. |
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