IDEAS home Printed from https://ideas.repec.org/a/eee/indorg/v89y2023ics016771872300053x.html
   My bibliography  Save this article

When can auctions maximize post-auction welfare?

Author

Listed:
  • Kasberger, Bernhard

Abstract

I study auctions in which firms bid for licenses that reduce their marginal costs in a post-auction downstream market. When there are three or more firms, I show that the Vickrey–Clarke–Groves (VCG) auction maximizes consumer surplus in dominant strategies if and only if it maximizes producer surplus in dominant strategies. With two firms, the effect on consumer surplus is ambiguous. When the VCG auction does not maximize consumer surplus, I show that consumer surplus can be maximized by adding caps, i.e., restricting the number of licenses a bidder can win. This might lower producer surplus.

Suggested Citation

  • Kasberger, Bernhard, 2023. "When can auctions maximize post-auction welfare?," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:indorg:v:89:y:2023:i:c:s016771872300053x
    DOI: 10.1016/j.ijindorg.2023.102972
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016771872300053X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijindorg.2023.102972?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Allocative externality; Caps; Set-asides; Innovation; Mergers and acquisitions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:indorg:v:89:y:2023:i:c:s016771872300053x. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.