Organising Competition for the Market

Abstract We study competition for the market in a setting where incumbents (and, to lesser extent, neighbouring incumbents) benefit from cost or information advantage. first compare outcome of staggered and synchronous tenders, before drawing implications design. find timing tenders interrelates with likelihood monopolisation. For high incumbency advantages and/or discount factors, monopolisation is expected, which case tendering preferable as it strengthens pressure that entrants exercise on monopolist. low other firms remain active, maximises competitive coming firms. use bus London illustrate our insights draw policy implications.