IDEAS home Printed from https://ideas.repec.org/a/rje/randje/v21y1990isummerp211-225.html
   My bibliography  Save this article

Firm Behavior in Franchise Monopoly Markets

Author

Listed:
  • Robin A. Prager

Abstract

This article presents empirical evidence concerning the value of franchise bidding competition as a means of controlling natural monopoly behavior. The analysis focuses on the cable television industry, using data collected in a survey of local government officials in cabled communities throughout the continental United States. One important potential problem raised by critics of franchise bidding is the ability of franchise winners to engage in ex post opportunistic behavior by reneging on the promises that they made in order to win the franchise contract. The results of my analysis suggest that although franchise competition does lead firms to engage in some degree of opportunistic behavior, the extent of opportunism is not severe. Furthermore, reputation effects appear to play a role in constraining firm behavior, while rate regulation actually seems to exacerbate ex post behavioral problems.

Suggested Citation

  • Robin A. Prager, 1990. "Firm Behavior in Franchise Monopoly Markets," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 211-225, Summer.
    • Handle: RePEc:rje:randje:v:21:y:1990:i:summer:p:211-225
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0741-6261%28199022%2921%3A2%3C211%3AFBIFMM%3E2.0.CO%3B2-%23&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eshien Chong & Carine Staropoli & Anne Yvrande-Billon, 2014. "Auction versus Negotiation in Public Procurement: Looking for Empirical Evidence," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00512813, HAL.
    2. Freddy Huet & Simon Porcher, 2013. "Innovation and regulatory outcomes: evidence from the public-private contracts for water supply in France," Chapters, in: Mehmet Ugur (ed.), Governance, Regulation and Innovation, chapter 9, pages 216-236, Edward Elgar Publishing.
    3. Austan Goolsbee & Amil Petrin, 2001. "The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable Television," NBER Working Papers 8317, National Bureau of Economic Research, Inc.
    4. Luc Baumstark & Claude Ménard & William Roy & Anne Yvrande-Billon, 2005. "Modes de gestion et efficience des opérateurs dans le secteur des transports urbains de personnes," Post-Print halshs-00103116, HAL.
    5. Amaral, Miguel, 2008. "Public vs private management of public utilities - The case of urban public transport in Europe," Research in Transportation Economics, Elsevier, vol. 22(1), pages 85-90, January.
    6. Anne Yvrande‐Billon, 2006. "The Attribution Process Of Delegation Contracts In The French Urban Public Transport Sector: Why Competitive Tendering Is A Myth," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 453-478, December.
    7. Hakam Kamleh, 2005. "La nouvelle organisation ferroviaire britannique : sur la frontière entre intégration et désintégration," CAE Working Papers 28, Aix-Marseille Université, CERGAM.
    8. Nicolas Dupas & Frédéric Marty & Arnaud Voisin, 2011. "Partnership contracts, project finance and information asymmetries: from competition for the contract to competition within the contract?," Post-Print halshs-00202327, HAL.
    9. Baldwin, Gordon G., 1991. "Servicing Thin Airline Markets in a Deregulated Environment," Transportation Research Forum Proceedings 1990s 319058, Transportation Research Forum.
    10. Yasuji Otsuka, 1999. "Another Look at Local Franchise Regulation and State Commission Regulation: Do They Really Matter?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(4), pages 341-356, December.
    11. Gregory S. Crawford, 2014. "Cable Regulation in the Internet Era," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 137-193, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:21:y:1990:i:summer:p:211-225. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.