Deficit Reduction Through Diversity: How Affirmative Action at the FCC Increased Auction Competition
AbstractIn recent auctions for paging licenses, the Federal Communications Commission has granted businesses owned by minorities and women substantial bidding credits. In this article, Professors Ayres and Cramton analyze a particular auction and argue that the affirmative action bidding preferences, by increasing competition among auction participants, increased the government's revenue by $45 million. Subsidizing the participation of new bidders can induce established bidders to bid more aggressively. The authors conclude that this revenue- enhancing effect does not provide a sufficient constitutional justification for affirmative action-but when such justification is independently present, affirmative actions can cost the government much less than is currently thought.
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Bibliographic InfoPaper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 96slr.
Length: 55 pages
Date of creation: 1996
Date of revision: 09 Jun 1998
Publication status: Published in Stanford Law Review, 48:4, April 1996, pages 761-815.
Contact details of provider:
Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu
Auctions; Affirmative Action;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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