Auctions with Endogenous Valuations, The Snowball Effect Revisited / Kala Krishna.

Format:

Book

Author/Creator:

Krishna, Kala.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3483.

NBER working paper series no. w3483

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

In most of the literature on auctions the valuations of agents are exogenously specified. This assumption may be inappropriate in a number of cases where valuations are better derived endogenously. Endogenous valuations are appropriate when there are many units being auctioned and their value is determined in a secondary market which is imperfectly competitive. The model is thus appropriate for studying the sale of quota licenses and scarce resources used in production when product markets are imperfectly competitive. A series of examples are developed to show how these models work. Particular models are developed which cast light on a number of issues in applied micro-economics. These issues include the evolution of market structure, in particular, the "snowball effect", the effect an market structure of selling quota licenses, and the relationship between increasing returns to scale and the monopolization of markets. The models also provide another resolution of the "transponder puzzle".

Notes:

Print version record

October 1990.