Dutch First Price Auctions for Public Service Provision
13 Pages Posted: 11 Jun 2007 Last revised: 12 Dec 2012
Date Written: June 8, 2009
Public service provision has undergone a significant process of reform which aim at increasing efficiency of the system and improving welfare. In most cases the regulator has to determine the reimbursement for the provider without observing costs. Another important characteristic of public service provision is related to workers' motivation, acting as private information rent to the provider. In this paper we analyse Dutch first price auction mechanisms to introduce competition in the market as a way to regulate the market in order to extract the information rent from the provider. In particular, single service and multiple object auctions are compared.
Keywords: Auction, N goods, private information
JEL Classification: C72, D44
Suggested Citation: Suggested Citation