IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/313007.html
   My bibliography  Save this paper

Bidding for subsidies with one's patience

Author

Listed:
  • Caspari, Gian

Abstract

We study the problem of distributing subsidies in a market that includes both marginal individuals in need of assistance and infra-marginal individuals who would purchase the subsidized product without additional incentives. We propose the use of a wait time auction, where individuals bid the amount of time they are willing to wait in exchange for a specified subsidy amount. This design enables more direct targeting of marginal individuals, thereby enhancing the overall effectiveness of the subsidy program. Furthermore, screening is costless in equilibrium as no wait times are imposed, and practical robustness against deviations from equilibrium behavior can be ensured by implementing a maximum allowable bid.

Suggested Citation

  • Caspari, Gian, 2025. "Bidding for subsidies with one's patience," ZEW Discussion Papers 25-009, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:313007
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/313007/1/191917754X.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Subsidies; Market Design; Auctions;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:zewdip:313007. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    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.