Do Auctions and Forced Divestitures increase Competition?

Arbeitspapier

Where markets are insufficiently competitive, governments can intervene by auctioninglicenses to operate or by forcing divestitures. The Dutch government has doneexactly that, organizing auctions to redistribute tenancy rights for highway gasolinestations and forcing the divestiture of outlets of four majors. We evaluate this policyexperiment using panel data containing detailed price information. We find that anobligation to divest lowers prices by over 2% while the auctioning of licenses withoutsuch an obligation has no discernible effect. We find weak evidence for price effects onnearby competitors.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 08-117/1

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Subject: Divestitures ; Auctions ; Entry ; Policy Evaluation ; Auktion ; Lizenz ; Tankstelle ; Autobahn ; Markteintritt ; Unvollkommener Wettbewerb ; Wirkungsanalyse ; Niederlande

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Soetevent, Adriaan R. ; Haan, Marco A. ; Heijnen, Pim
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/86905
• Last update: 10.03.2025, 11:41 AM CET