Abstract

http://ssrn.com/abstract=1119312
 
 

References (134)



 
 

Citations (2)



 


 



Competition Policy in Auctions and 'Bidding Markets'


Paul Klemperer


University of Oxford - Department of Economics; Centre for Economic Policy Research (CEPR)


HANDBOOK OF ANTITRUST ECONOMICS, P. Buccirossi, ed., MIT Press, Forthcoming

Abstract:     
The existence of a "bidding market" is commonly cited as a reason to tolerate the creation or maintenance of highly concentrated markets. We discuss three erroneous arguments to that effect: the "consultants' fallacy" that "market power is impossible", the "academics' fallacy" that (often) "market power does not matter", and the "regulators' fallacy" that "intervention against pernicious market power is unnecessary", in markets characterised by auctions or bidding processes.

Furthermore we argue that the term "bidding market" as it is widely used in antitrust is unhelpful or misleading. Auctions and bidding processes do have some special features - including their price formation processes, common-values behaviour, and bid-taker power - but the significance of these features has been overemphasized, and they often imply a need for stricter rather than more lenient competition policy.

Number of Pages in PDF File: 60

Keywords: Auctions, Bidding Markets, Competition Policy, Bidding, Antitrust, Market Power, Common Values, Anti-trust

JEL Classification: L400, D440, K210, L100

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Date posted: April 11, 2008  

Suggested Citation

Klemperer, Paul, Competition Policy in Auctions and 'Bidding Markets'. Available at SSRN: http://ssrn.com/abstract=1119312

Contact Information

Paul Klemperer (Contact Author)
University of Oxford - Department of Economics ( email )
Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom
+44 1865 278 588 (Phone)
+44 1865 278 557 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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