License Prices for Financially Constrained Firms

Roberto Burguet and Randolph McAfee

No 224, Working Papers from Barcelona School of Economics

Abstract: It is often alleged that high auction prices inhibit build-out. We investigate this claim under the extreme case of budget-constrained bidders. Low prices maximize overall the gains from trade. If there are n licenses, the price where the budget constraint just binds maximizes consumer surplus if the elasticity of demand is less than one plus 1/n. If demand is elastic, auctions maximize consumer surplus when build-out expenditure greater than one over the elasticity of demand. This appears to be true for most of the auctions run.

Date: 2005-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/224.pdf (application/pdf)

Related works:
Journal Article: License prices for financially constrained firms (2009)
Working Paper: License Prices for Financially Constrained Firms (2008)
Working Paper: License Prices for Financially Constrained Firms (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:224

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().