Organizing Competition for the Market

Elisabetta Iossa, Patrick Rey and Michael Waterson

No 13461, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper studies competition for the market in a setting where incumbents (and, to a lesser extent, neighboring incumbents) benefit from a cost advantage. The paper first compares the outcome of staggered and synchronous tenders, before drawing the implications for market design. We find that the timing of tenders should depend on the likelihood of monopolization. When monopolization is expected, synchronous tendering is preferable, as it strengthens the pressure that entrants exercise on the monopolist. When instead other firms remain active, staggered tendering is preferable, as it maximizes the competitive pressure that comes from the other firms.

Keywords: Dynamic procurement; Incumbency advantage; Local monopoly; Competition; Asymmetric auctions; Synchronous contracts; Staggered contracts (search for similar items in EconPapers)
JEL-codes: D44 D47 H40 H57 L43 L51 R48 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Organising Competition for the Market (2022)
Working Paper: Organizing Competition for the Market (2021)
Working Paper: Organizing Competition for the Market (2019)
Working Paper: Organizing Competition for the Market (2019)
Working Paper: Organizing Competition for the Market (2019)
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