| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 957757 | Journal of Economic Theory | 2007 | 7 Pages |
Abstract
We demonstrate that auctioning market licenses may result in higher market prices than assigning them via more random allocation mechanisms. When future market profit is uncertain, winning an auction is like winning a lottery ticket. If firms differ in risk attitudes, auctions select the least risk-averse firm, which, in turn, set a higher price (or a higher quantity, in case quantity is the decision variable) in the marketplace than an average firm.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Maarten C.W. Janssen, Vladimir A. Karamychev,