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Organizing Competition for the Market

Elisabetta Iossa, Patrick Rey () and Michael Waterson

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

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 tenderingis preferable, asitmaximizesthe competitivepressure 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 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-ind
Date: 2019
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https://warwick.ac.uk/fac/soc/economics/research/w ... rp_1188_waterson.pdf

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Working Paper: Organizing Competition for the Market (2019) Downloads
Working Paper: Organizing Competition for the Market (2019) Downloads
Working Paper: Organizing Competition for the Market (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1188

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