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On the design of optimal auctions for road concessions: Firm selection, government payments, toll and capacity schedules with imperfect information

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  • Shu, Hang
  • Durango-Cohen, Pablo L.

Abstract

We consider firms with privately-known production efficiencies, captured in their cost structure, bidding for a road concession agreement with a government seeking to maximize the expected public welfare generated by the project. The setting is motivated by the increasing trend in road privatization around the world, and the need to design auctions leading to efficient outcomes: firm selection, government payments, toll and capacity schedules, which determine public welfare and firm profits.

Suggested Citation

  • Shu, Hang & Durango-Cohen, Pablo L., 2021. "On the design of optimal auctions for road concessions: Firm selection, government payments, toll and capacity schedules with imperfect information," Transportation Research Part B: Methodological, Elsevier, vol. 146(C), pages 210-236.
    • Handle: RePEc:eee:transb:v:146:y:2021:i:c:p:210-236
    DOI: 10.1016/j.trb.2021.03.001
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