Auctioning business licenses to engage in Cournot competition

Myeonghwan Cho and Joon Song

Economics Letters, 2022, vol. 210, issue C

Abstract: We study auctions for business licenses, where only the winners can participate in Cournot competition. This is an example of a multi-unit auction with endogenous and interdependent values. We compare a pay-as-bid auction and a uniform price auction. Assuming that only the winners’ identity and their payments are announced after the auction, the former auction is advantageous in terms of auction revenue, and the latter is advantageous in terms of consumer surplus.

Keywords: Multi-unit auction; Post-auction competition; License auction (search for similar items in EconPapers)
JEL-codes: D21 D43 D44 D45 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:210:y:2022:i:c:s0165176521004390

DOI: 10.1016/j.econlet.2021.110176

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