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Author Info
Zvika Neeman (Boston University and Hebrew University)
Gerhard Orosel (University of Vienna)

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Abstract

We analyze a model of repeated franchise bidding for natural monopoly with contestable licensing -- a franchisee holds an (exclusive) license to operate a franchise until another firm offers to pay more for it. In a world where quality is observable but not verifiable, the simple regulatory scheme we describe combines market-like incentives with regulatory oversight to generate efficient outcomes.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Economic Analysis & Policy.

Volume (Year): 3 (2004)
Issue (Month): 1 ()
Pages: 1129-1129
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Handle: RePEc:bep:eapcon:v:3:y:2004:i:1:p:1129-1129

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Related research
Keywords: franchise bidding natural monopoly regulation contestable markets quality

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Find related papers by JEL classification:
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Jehiel, Philippe & Moldovanu, Benny, 1995. "Cyclical Delay in Bargaining with Externalities," Review of Economic Studies, Blackwell Publishing, vol. 62(4), pages 619-37, October. [Downloadable!] (restricted)
    Other versions:
  2. Gabszewicz, Jean J. & Wauthy, Xavier Y., 2002. "Quality underprovision by a monopolist when quality is not costly," Economics Letters, Elsevier, vol. 77(1), pages 65-72, September. [Downloadable!] (restricted)
  3. Riordan, Michael H & Sappington, David E M, 1987. "Awarding Monopoly Franchises," American Economic Review, American Economic Association, vol. 77(3), pages 375-87, June. [Downloadable!] (restricted)
  4. Hermalin, Benjamin E & Katz, Michael L, 1991. "Moral Hazard and Verifiability: The Effects of Renegotiation in Agency," Econometrica, Econometric Society, vol. 59(6), pages 1735-53, November. [Downloadable!] (restricted)
    Other versions:
  5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August. [Downloadable!] (restricted)
  6. Laffont, Jean-Jacques & Tirole, Jean, 1987. "Auctioning Incentive Contracts," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 921-37, October. [Downloadable!] (restricted)
    Other versions:
  7. Mark A. Zupan, 1989. "Cable Franchise Renewals: Do Incumbent Firms Behave Opportunistically?," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 473-482, Winter. [Downloadable!] (restricted)
  8. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics. [Downloadable!]
  9. Edlin, Aaron S & Hermalin, Benjamin E, 2001. "Implementing the First Best in an Agency Relationship with Renegotiation: A Corrigendum," Econometrica, Econometric Society, vol. 69(5), pages 1391-95, September.
  10. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August. [Downloadable!] (restricted)
  11. Jeheil Phillippe, 1995. "Limited Horizon Forecast in Repeated Alternate Games," Journal of Economic Theory, Elsevier, vol. 67(2), pages 497-519, December. [Downloadable!] (restricted)
  12. Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1176-1206, 09. [Downloadable!] (restricted)
    Other versions:
  13. Shapiro, Carl, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 659-79, November. [Downloadable!] (restricted)
  14. Richard A. Posner, 1972. "The Appropriate Scope of Regulation in the Cable Television Industry," Bell Journal of Economics, The RAND Corporation, vol. 3(1), pages 98-129, Spring. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jörg Borrmann, 2004. "Franchise Bidding for Postal Services in Rural Regions," Topics in Economic Analysis & Policy, Berkeley Electronic Press, vol. 4(1), pages 1178-1178. [Downloadable!] (restricted)
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