Oligopoly, Auctions and Market Quality

verfasst von: Krishnendu Ghosh Dastidar

Verlag: Springer Japan

Buchreihe : Economics, Law, and Institutions in Asia Pacific

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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This book provides an economic analysis of various aspects of ‘market quality’, a new concept which emerged in the 21st century, using the tools of ‘oligopoly theory’ and ‘auction theory’ that evolved over the 19th and 20th centuries. In the economics literature the link between the theories of oligopoly and auctions with market quality remains largely unexplored. This book attempts to forge such a link as it brings together relevant theoretical results in the literature on these topics under a unified framework. While the book is mainly theoretical in nature, it also discusses some specific issues related to the problems of market quality in emerging economies like India. Illustrated by carefully chosen examples, this book is highly recommended to readers who seek an in-depth and up-to-date integrated overview of the new field of market quality economics and are interested in some open research problems in this area.

How should auctions and other allocation mechanisms be designed for oligopolistic industries to achieve such goals as efficiency, high-quality output and fast production? Krishnendu Ghosh Dastidar’s book offers novel analysis of this question and also some interesting answers. Highly recommended.

Eric S. Maskin, Nobel laureate in Economics

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract

In chapter 1 we provide a brief overview of oligopoly theory, auction theory and market quality theory. The genesis of ‘oligopoly theory’ can be traced to the nineteenth century with the publication of the seminal work by Augustin Cournot in 1838. The advent of game theory in the twentieth century made possible the formalization of important ideas about oligopoly. Modern ‘auction theory’ began with the remarkable contribution by William Vickrey in 1961. The full flowering of auction theory came later in the 1970s and 1980s. ‘Market quality’ is a relatively new concept that came up in the twenty-first century based on the research of Makoto Yano. We also provide a summary of the entire book in this chapter.

Krishnendu Ghosh Dastidar

Chapter 2. Allocation of Scarce Resources

Abstract

In chapter 2 we discuss the problem of allocation of scarce resources (like radio spectrum or coal). How should the government in an emerging economy allocate such a scarce resource? Note that in emerging economies this is an extremely important policy issue. Conventional wisdom suggests that auctions are probably superior to administrative mechanisms as total welfare is likely to be higher with auctions. We demonstrate this need not be true in a multimarket oligopoly set-up. This has serious policy implications in emerging economies.

Krishnendu Ghosh Dastidar

Chapter 3. Effects of Corruption and Incompetence in the Quality Monitoring Process

Abstract

In many emerging economies there is a lot of corruption and sheer incompetence in the quality monitoring process and this often leads to poor quality of infrastructure and high prices. In chapter 3 we analyze the impact of such corruption and incompetence on welfare and market quality. We construct two models to demonstrate the following: (i) In the first model we show how corruption in quality monitoring process leads to higher prices, lower quality, lower total welfare and market quality. (ii) In the second model we demonstrate how sheer ‘incompetence’ in the quality monitoring process leads to higher prices. While total welfare does not change with such incompetence, the consumers are worse off and the producers are better off. This means ‘incompetence’ transfers surplus from the consumers to the producers.

Krishnendu Ghosh Dastidar

Chapter 4. On Some Aspects of Scoring Auctions

Abstract

Scoring auctions are important mechanisms for procurement in both developed and developing countries. Till date the literature has mainly dealt with cases where the scoring rule is quasilinear. Very few papers in the literature have dealt with non-quasilinear scoring rules. In chapter 4 we fill this gap. Under some conditions we derive a clear ranking of the expected scores in first-score and second-score auctions. We show how in many cases second price auctions lead to higher expected score. We show with the help of two examples, that while expected score may be higher with second-score auctions, total expected welfare need not be higher.

Krishnendu Ghosh Dastidar

Chapter 5. Some Specific Market Quality Issues in Emerging Economies

Abstract

Chapter 5 discusses some specific issues and provide a survey of some recent results pertaining to the problems of market quality in emerging economies like India. We show how in some specific cases, insights from the theoretical results on oligopoly and auctions can be used to improve market quality. We also pose some research problems that may be taken up. We select the following themes: (i) Delegation in scoring auction (ii) Restricted entry and market quality (iii) Public Sector Leadership (iv) Designing credit institutions and (v) Corruption and Union Leadership.

Krishnendu Ghosh Dastidar

Backmatter

Titel: Oligopoly, Auctions and Market Quality
verfasst von: Krishnendu Ghosh Dastidar
Verlag: Springer Japan
Electronic ISBN: 978-4-431-55396-0
Print ISBN: 978-4-431-55395-3
DOI: https://doi.org/10.1007/978-4-431-55396-0

Springer Professional

Über dieses Buch

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Chapter 2. Allocation of Scarce Resources

Chapter 3. Effects of Corruption and Incompetence in the Quality Monitoring Process

Chapter 4. On Some Aspects of Scoring Auctions

Chapter 5. Some Specific Market Quality Issues in Emerging Economies

Backmatter

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