Auctions for Concessions in Natural Monopoly Industries in the Context of Tariff Regulation

R. Martusevich

Voprosy Ekonomiki, 2008, issue 4

Abstract: Tenders for infrastructure concessions are on the agenda in Russia. The theory of the competitive biddings for concessions originates from the idea of "competition for the field", further developed by H. Demsetz into the franchise bidding theory. But so far, tenders for concessions which took place in different infrastructure sectors have questioned whether the number of bidders was high enough to expect the results (tenders outcomes) predicted by Demsetz. In the article this question is answered basing on the theory of auctions with independent private values and with the price as a single selection criterion under different business strategies of the bidders. Some recommendations are proposed. The necessity as well as some limitations of usage of such tenders’ results for natural monopolists’ tariff regulation are shown.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2008:id:1293

DOI: 10.32609/0042-8736-2008-4-141-157

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