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Bailouts and the preservation of competition: The case of the federal timber contract payment modification act

Publication ,  Journal Article
Roberts, JW; Sweeting, A
Published in: American Economic Journal: Microeconomics
January 1, 2016

We estimate the value of competition in United States Forest Service (USFS) timber auctions, in the context of the Reagan administration's bailout of firms that faced substantial losses on existing contracts. We use a model with endogenous entry by asymmetric firms, allowing survivors to respond to the exit of bailed-out firms by entering more auctions and for these marginal entrants to have lower values than firms that would choose to enter in any event, a selective entry effect. Observed asymmetries and selective entry contribute to us finding that the bailout may have increased USFS revenues in subsequent auctions quite substantially.

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Published In

American Economic Journal: Microeconomics

DOI

EISSN

1945-7685

ISSN

1945-7669

Publication Date

January 1, 2016

Volume

8

Issue

3

Start / End Page

257 / 288

Related Subject Headings

  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 14 Economics
 

Citation

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Roberts, J. W., & Sweeting, A. (2016). Bailouts and the preservation of competition: The case of the federal timber contract payment modification act. American Economic Journal: Microeconomics, 8(3), 257–288. https://doi.org/10.1257/mic.20150070
Roberts, J. W., and A. Sweeting. “Bailouts and the preservation of competition: The case of the federal timber contract payment modification act.” American Economic Journal: Microeconomics 8, no. 3 (January 1, 2016): 257–88. https://doi.org/10.1257/mic.20150070.
Roberts JW, Sweeting A. Bailouts and the preservation of competition: The case of the federal timber contract payment modification act. American Economic Journal: Microeconomics. 2016 Jan 1;8(3):257–88.
Roberts, J. W., and A. Sweeting. “Bailouts and the preservation of competition: The case of the federal timber contract payment modification act.” American Economic Journal: Microeconomics, vol. 8, no. 3, Jan. 2016, pp. 257–88. Scopus, doi:10.1257/mic.20150070.
Roberts JW, Sweeting A. Bailouts and the preservation of competition: The case of the federal timber contract payment modification act. American Economic Journal: Microeconomics. 2016 Jan 1;8(3):257–288.

Published In

American Economic Journal: Microeconomics

DOI

EISSN

1945-7685

ISSN

1945-7669

Publication Date

January 1, 2016

Volume

8

Issue

3

Start / End Page

257 / 288

Related Subject Headings

  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 14 Economics