Mergers, Cartels, Set-Asides, and Bidding Preferences in Asymmetric Oral Auctions
AbstractFrom bidding data, we estimate the underlying value distribution for Forest Service timber. We find that bidder values decrease $2/mbf (thousand board feet) with each mile from the tract and that small firms (fewer than 500 employees) have values that are $72/mbf lower than large firms. The empirical value distribution is used to simulate various hypothetical scenarios designed to inform public policy. The most anticompetitive mergers raise price by less than 3%, and a 4% decline in marginal costs through greater merger efficiencies is enough to offset a 1% anticompetitive price increase. Eliminating the SBA set-aside program would raise timber revenues by 15%. A policy of granting bidding preferences to small and more-distant bidders would raise revenue by approximately one-tenth of one percent. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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Bibliographic InfoArticle provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 82 (2000)
Issue (Month): 2 (May)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- How NOT to implement a policy of discrimination
by Luke Froeb in managerial econ on 2012-01-31 22:45:00
- Susan Athey & Jonathan Levin & Enrique Seira, 2008.
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- Susan Athey & Jonathan Levin & Enrique Seira, 2008. "Comparing Open and Sealed Bid Auctions: Evidence from Timber Auctions," Discussion Papers 08-012, Stanford Institute for Economic Policy Research.
- Gregory Werden & Luke Froeb & James Langenfeld, 2000. "Lost Profits from Patent Infringement: The Simulation Approach," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 7(2), pages 213-227.
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- Ivaldi, Marc & Motis, Jrissy, 2007.
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200702, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Budzinski, Oliver & Christiansen, Arndt, 2007. "The Oracle/PeopleSoft case: unilateral effects, simulation models and econometrics in contemporary merger control," IBES DiskussionsbeitrÃ¤ge 157, University of Duisburg-Essen, Faculty for Economics and Business Administration.
- Keith Waehrer & Martin Perry, 2002.
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- Srabana Gupta, 2001. "The Effect of Bid Rigging on Prices: A Study of the Highway Construction Industry," Review of Industrial Organization, Springer, vol. 19(4), pages 451-465, December.
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