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| Dosi, Cesare; Moretto, Michele. |
| We study the competition to acquire the exclusive right to operate an infrastructure service, by comparing two different specifications for the financial proposals - "lowest price to consumers" vs "highest concession fee", and two alternative contractual arrangements: a contract which imposes the obligation to immediately undertake the investment required to operate the concessioned service and a contract which simply assigns to the winning bidder the right to supply the market at a date of her choosing. By comparing the returns of these alternative award criteria and concessioning conditions, we show that concessioning without imposing rollout time limits may or may not provide a higher expected social value, depending on the bidding rule used to allocate... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Concessions; Auctions; Award criteria; Service Rollout Time limits; Public Economics; L51; D44; D92. |
| Ano: 2009 |
URL: http://purl.umn.edu/50409 |
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| Dosi, Cesare; Moretto, Michele. |
| We study the competition to operate an infrastructure service by developing a model where firms must report a two-dimensional sealed bid: the price to consumers and the concession fee paid to the government. Two bidding rules are considered in this paper. One rule consists of awarding the concession to the firm that reports the lowest price. The other consists of granting the franchise to the bidder offering the highest fee. We compare the outcome of these rules with reference to two alternative concession arrangements. The former imposes the obligation to immediately undertake the investment required to roll-out the service. The latter allows the concessionaire to optimally decide the investment timing. The focus is on the effect of bidding rules and... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Concessions; Auctions; Bidding Rules; Managerial Flexibility; Research Methods/ Statistical Methods; L51; D44; D92. |
| Ano: 2006 |
URL: http://purl.umn.edu/6630 |
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| Moretto, Michele; Dosi, Cesare. |
| We study the competition to operate an infrastructure service by developing a model where firms report a two-dimensional sealed bid: the price to consumers and the concession fee paid to the government. Two alternative bidding rules are considered in this paper. One rule consists of awarding the exclusive right of exercise to the firm that reports the lowest price. The other consists of granting the franchise to the bidder offering the highest fee. We compare the outcome of these rules with reference to two alternative concession arrangements. The former imposes the obligation to immediately undertake the investment required to roll-out the service. The latter allows the winning bidder to optimally decide the investment time. The focus is on the effect of... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Political Economy. |
| Ano: 2007 |
URL: http://purl.umn.edu/12196 |
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| Dosi, Cesare; Moretto, Michele. |
| Exclusive rights granted by public authorities, like concessions to develop natural resources or electromagnetic spectrum licences, often have option-like features. However, to avoid licences being unused for lengthy periods, regulators sometimes set time limits, after which the exclusive right of exercise may be revoked. In this paper we analyse the impact of use or lose ("UOL") provisions upon the private time of investment. We find that the risk of losing the licence because of inaction generally increases the probability of early investment. However, when capital costs are expected to decline over time, UOL provisions may involve a "perverse effect", by increasing, rather than reducing, the expected time of investment, with respect to a situation where... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Licences; Real Options; Use or Lose Provisions; Time of Investment; Financial Economics; L51; D44; D92. |
| Ano: 2010 |
URL: http://purl.umn.edu/59756 |
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