Beating Coase at Monopoly

Lluis Bru; Daniel Cardona; Jozsef Sakovics

Beating Coase at Monopoly

Lluis Bru, Daniel Cardona, Jozsef Sakovics

School of Economics

Research output: Working paper › Discussion paper

Abstract

We study how a buyer unable to price discriminate should satisfy his demand in
the presence of diseconomies of scale in production. Defying the Coase Conjecture,
we show that auctioning contracts for lots (block sourcing) followed by setting a
price to realize (part of) the residual gains from trade always leads to higher buyer
surplus than simply setting a price.

Original language	English
Publisher	Edinburgh School of Economics Discussion Paper Series
Number of pages	21
Volume	291
Publication status	Published - 11 Jun 2019

Keywords / Materials (for Non-textual outputs)

block sourcing
lot auction
monopoly
procurement
residual market
split awards
D42
D44
L12

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291_Beating Coase at MonopolySubmitted manuscript, 902 KB

Transparency in Procurement: The design and use of information in trading mechanisms.
Sakovics, J. & Visschers, L.
ESRC
1/01/16 → 31/12/18
Project: Research

Cite this

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AB - We study how a buyer unable to price discriminate should satisfy his demand inthe presence of diseconomies of scale in production. Defying the Coase Conjecture,we show that auctioning contracts for lots (block sourcing) followed by setting aprice to realize (part of) the residual gains from trade always leads to higher buyersurplus than simply setting a price.

KW - block sourcing

KW - lot auction

KW - monopoly

KW - procurement

KW - residual market

KW - split awards

KW - D42

KW - D44

KW - L12

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BT - Beating Coase at Monopoly

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Beating Coase at Monopoly

Abstract

Keywords / Materials (for Non-textual outputs)

Access to Document

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Projects

Transparency in Procurement: The design and use of information in trading mechanisms.

Cite this