Least‐Present‐Value‐of‐Revenue Auctions and Highway Franchising
نویسندگان
چکیده
منابع مشابه
Least-Present-Value-of-Revenue Auctions and Highway Franchising
In this paper we show that fixed-term contracts, which are commonly used to franchise highways, do not allocate demand risk optimally. We characterize the optimal risk-sharing contract and show that it can be implemented with a fairly straightforward mechanism—a least-present-value-of-revenue auction. Instead of bidding on tolls (or franchise lengths), as in the case of fixed-term franchises, i...
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It has become increasingly common to allocate highway franchises to the bidder that offers to charge the lowest toll. Often, building a highway increases the value of land held by a small group of developers, an effect that is more pronounced with lower tolls. We study the welfare implications of highway franchises that benefit large developers, focusing on the incentives developers have to int...
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This paper considers the welfare impacts of a range of franchising regimes for congestible highways. For a single road in isolation, it is shown that a competitive auction with the level of road use as the decision criterion produces the socially optimal road (in terms of capacity and toll level) as the equilibrium outcome, provided constant returns to scale characterize highway operations. The...
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We use data from highway procurement auctions subject to California’s Small Business Preference program to study the effect of bid preferences on auction outcomes. Our analysis is based on an estimated model of firms’ bidding and participation decisions, which allows us to evaluate the effects of current and alternative policy designs. We show that incorporating participation responses signific...
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We use highway procurement auction data to analyze the California Small Business program that awards a contract to a qualified small bidder provided its bid is within five percent of the overall low bid. We study the effect of this rule on bidders’ incentives to participate in procurement auctions and compute its implied efficiency and distributional costs. Small bidder can use the discount to ...
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ژورنال
عنوان ژورنال: Journal of Political Economy
سال: 2001
ISSN: 0022-3808,1537-534X
DOI: 10.1086/322832