How To Avoid Awarding a Valuable Asset
AbstractMany mechanisms (such as auctions) efficiently allocate a good to the firm which most highly values it. But sometimes the owner of the asset or good may wish to transfer it only if it is not too valuable to potential buyers. The allocation problem becomes especially difficult when the potential buyers have private information about the assetâ€™s value. We describe several mechanisms which are efficient, or nearly so. We also show that rent seeking, and lobbying, rather than merely wasting resources, can lead to allocations which are close to efficient.
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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 050619.
Length: 21 pages
Date of creation: Jan 2006
Date of revision:
Rent seeking; Lobbying; Auctions; Asymmetric information;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-03 (All new papers)
- NEP-CFN-2006-09-03 (Corporate Finance)
- NEP-FMK-2006-09-03 (Financial Markets)
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.:
- Konrad, Kai A. & Kovenock, Dan, 2006.
Purdue University Economics Working Papers
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