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NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID

Publication ,  Journal Article
VARMA, GD; LOPOMO, G
Published in: The Journal of Industrial Economics
June 2010

We examine the impact of potential entry on incumbent bidding behavior in license auctions, in both dynamic and sealed bid formats. Unlike sealed bid auctions, dynamic auctions reveal information about the identities of potential winners and allow bidders to revise their bids. This helps incumbents to coordinate their entry deterrence efforts. If entry is sufficiently costly for each incumbent, only the dynamic auction has an equilibrium where entry is deterred for sure. Numerical calculations suggest that, regardless of how costly entry is for each incumbent, sealed bid auctions can generate a higher probability of entry as well as a more efficient allocation. Copyright 2010 The Authors. Journal compilation 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

Duke Scholars

Published In

The Journal of Industrial Economics

Publication Date

June 2010

Volume

58

Issue

2

Start / End Page

450 / 476

Related Subject Headings

  • Economics
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory
 

Citation

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ICMJE
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VARMA, G. D., & LOPOMO, G. (2010). NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID -super-* . The Journal of Industrial Economics, 58(2), 450–476.
VARMA, GOPAL D. A. S., and G. I. U. S. E. P. P. E. LOPOMO. “NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID -super-* .” The Journal of Industrial Economics 58, no. 2 (June 2010): 450–76.
VARMA GD, LOPOMO G. NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID -super-* . The Journal of Industrial Economics. 2010 Jun;58(2):450–76.
VARMA, GOPAL D. A. S., and G. I. U. S. E. P. P. E. LOPOMO. “NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID -super-* .” The Journal of Industrial Economics, vol. 58, no. 2, June 2010, pp. 450–76.
VARMA GD, LOPOMO G. NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID -super-* . The Journal of Industrial Economics. 2010 Jun;58(2):450–476.

Published In

The Journal of Industrial Economics

Publication Date

June 2010

Volume

58

Issue

2

Start / End Page

450 / 476

Related Subject Headings

  • Economics
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory