Incumbency and entry in license auctions: The Anglo-Dutch auction meets another simple alternative

B-Tier
Journal: International Journal of Industrial Organization
Year: 2008
Volume: 26
Issue: 3
Pages: 730-745

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The existence of ex-ante strong incumbents may constitute a barrier to entry in auctions for goods such as licenses. Favoring the allocation to entrants is a way to induce entry and thus create competition. Designs such as the Anglo-Dutch auction have been proposed with this goal in mind. We first show that the Anglo-Dutch auction does indeed foster entry and increases the revenues of the seller. However, we argue that a more effective way could be to stage the allocation of the good so that each stage reveals information about the participants. We show that a sequence of English auctions, with high reserve prices in early rounds, fulfils this property and is more efficient than any one-stage entry auction. Moreover, it also outperforms the Anglo-Dutch auction in terms of seller's revenues.

Technical Details

RePEc Handle
repec:eee:indorg:v:26:y:2008:i:3:p:730-745
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-24