Auctions to implement the efficient market structure

Georg Gebhardt and Achim Wambach

International Journal of Industrial Organization, 2008, vol. 26, issue 3, 846-859

Abstract: We consider a regulator who does not know how many firms should be granted a license to enter a market as he has limited information on their setup costs. We propose two auction formats which implement the efficient market structure. In a "jumping English auction" the price for a license increases continuously most of the times, but jumps at pre-specified points. After each jump, the number of winning bids is increased by one. The second auction is a multi unit auction based on the design of the UMTS auction in Austria and Germany, where firms can bid on more or less packages.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:26:y:2008:i:3:p:846-859

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