Deficit Reduction Through Diversity: How Affirmative Action at the FCC Increased Auction Competition
Ian Ayres () and
Peter Cramton ()
Papers of Peter Cramton from University of Maryland, Department of Economics - Peter Cramton
In recent auctions for paging licenses, the Federal Communications Commission has granted businesses owned by minorities and women substantial bidding credits. In this article, Professors Ayres and Cramton analyze a particular auction and argue that the affirmative action bidding preferences, by increasing competition among auction participants, increased the government's revenue by $45 million. Subsidizing the participation of new bidders can induce established bidders to bid more aggressively. The authors conclude that this revenue- enhancing effect does not provide a sufficient constitutional justification for affirmative action-but when such justification is independently present, affirmative actions can cost the government much less than is currently thought.
Keywords: Auctions; Affirmative Action (search for similar items in EconPapers)
JEL-codes: D44 H20 H53 L96 (search for similar items in EconPapers)
Pages: 55 pages
Date: 1996, Revised 1998-06-09
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Published in Stanford Law Review, 48:4, April 1996, pages 761-815.
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Persistent link: https://EconPapers.repec.org/RePEc:pcc:pccumd:96slr
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