Do Auctions and Forced Divestitures increase Competition?
AbstractWhere markets are insufficiently competitive, governments can intervene by auctioninglicenses to operate or by forcing divestitures. The Dutch government has doneexactly that, organizing auctions to redistribute tenancy rights for highway gasolinestations and forcing the divestiture of outlets of four majors. We evaluate this policyexperiment using panel data containing detailed price information. We find that anobligation to divest lowers prices by over 2% while the auctioning of licenses withoutsuch an obligation has no discernible effect. We find weak evidence for price effects onnearby competitors.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-117/1.
Date of creation: 08 Dec 2008
Date of revision: 02 Aug 2011
Contact details of provider:
Web page: http://www.tinbergen.nl
Divestitures; Auctions; Entry; Policy Evaluation;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-17 (All new papers)
- NEP-COM-2009-01-17 (Industrial Competition)
- NEP-MIC-2009-01-17 (Microeconomics)
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.:
- Abrantes-Metz, Rosa M. & Froeb, Luke M. & Geweke, John & Taylor, Christopher T., 2006. "A variance screen for collusion," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 24(3), pages 467-486, May.
- Lach, Saul & Moraga-GonzÃ¡lez, JosÃ©-Luis, 2009.
"Asymmetric Price Effects of Competition,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
7319, C.E.P.R. Discussion Papers.
- Pim Heijnen & Marco A. Haan & Adriaan R. Soetevent, 2012. "Screening for Collusion: A Spatial Statistics Approach," Tinbergen Institute Discussion Papers 12-058/1, Tinbergen Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.