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License Prices for Financially Constrained Firms Author info | Abstract | Publisher info | Download info | Related research | Statistics Roberto Burguet ()
R. Preston McAfee ()
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It is often alleged that high auction prices inhibit service deployment. We investigate this claim under the extreme case of financially constrained bidders. If demand is just slightly elastic, auctions maximize consumer surplus if consumer surplus is a convex function of quantity (a common assumption), or if consumer surplus is concave and the proportion of expenditure spent on deployment is greater than one over the elasticity of demand. The latter condition appears to be true for most of the large telecom auctions in the US and Europe. Thus, even if high auction prices inhibit service deployment, auctions appear to be optimal from the consumers' point of view.
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Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number
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Date of creation: 02 Jun 2008Date of revision:
Handle: RePEc:aub:autbar:745.08Contact details of provider: Postal: 08193, Bellaterra, Barcelona Phone: 34 93 592 1203 Web page: http://pareto.uab.cat More information through EDIRC
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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.)
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