Abstract

http://ssrn.com/abstract=1313602
 
 

References (31)



 


 



Do Auctions and Forced Divestitures Increase Competition? Evidence for Retail Gasoline Markets


Adriaan R. Soetevent


University of Groningen; Tinbergen Institute

Marco A. Haan


University of Groningen

Pim Heijnen


University of Amsterdam - Faculty of Economics and Business (FEB)

December 8, 2008

Tinbergen Institute Discussion Paper No. 08-117/1

Abstract:     
Where markets are insufficiently competitive, governments can intervene by auctioning licenses to operate or by forcing divestitures. The Dutch government has done exactly that, organizing auctions to redistribute tenancy rights for high-way gasoline stations and forcing the divestiture of outlets of four majors. We evaluate this policy experiment using panel data containing detailed price information. Accounting for non-randomness of the sites are auctioned, we find that an obligation to divest lowers prices by over 2% while the auctioning of licenses without such an obligation has no discernible effect. We find no evidence for price effects on nearby competitors.

Number of Pages in PDF File: 41

Keywords: Divestitures, Auctions, Entry, Policy Evaluation

JEL Classification: D43, D44, L11

working papers series


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Date posted: December 10, 2008  

Suggested Citation

Soetevent, Adriaan R. and Haan, Marco A. and Heijnen, Pim, Do Auctions and Forced Divestitures Increase Competition? Evidence for Retail Gasoline Markets (December 8, 2008). Tinbergen Institute Discussion Paper No. 08-117/1. Available at SSRN: http://ssrn.com/abstract=1313602 or http://dx.doi.org/10.2139/ssrn.1313602

Contact Information

Adriaan R. Soetevent (Contact Author)
University of Groningen ( email )
P.O. Box 800
9700 AV Groningen
Netherlands
++ 31 50 363 7018 (Phone)
HOME PAGE: http://www.soetevent.com
Tinbergen Institute
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
Marco A. Haan
University of Groningen ( email )
P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 7327 (Phone)
+31 50 363 7227 (Fax)
Pim Heijnen
University of Amsterdam - Faculty of Economics and Business (FEB) ( email )
Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
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