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Transferable Licenses vs. Nontransferable Licences: What Is the Difference?

Author

Listed:
  • Krishna, K.
  • Tan, L.H.

Abstract

This paper questions the presumption that transferable quota licenses are worth more and result in higher welfare. We show that the price of a transferable license will tend to be higher than of its nontransferable counterpart only if the underlying quota is quite restrictive.

Suggested Citation

  • Krishna, K. & Tan, L.H., 1996. "Transferable Licenses vs. Nontransferable Licences: What Is the Difference?," Papers 2-96-2, Pennsylvania State - Department of Economics.
    • Handle: RePEc:fth:pensta:2-96-2
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    References listed on IDEAS

    as
    1. Riccardo Faini & Jaime Melo & Wendy Takacs, 1995. "A Primer on the MFA Maze," The World Economy, Wiley Blackwell, vol. 18(1), pages 113-135, January.
    2. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    3. Lott, John R, Jr, 1987. "Licensing and Nontransferable Rents," American Economic Review, American Economic Association, vol. 77(3), pages 453-455, June.
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    Cited by:

    1. Spencer, Barbara J., 1997. "Quota licenses for imported capital equipment: Could bureaucrats ever do better than the market?," Journal of International Economics, Elsevier, vol. 43(1-2), pages 1-27, August.

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    More about this item

    Keywords

    ENTERPRISES; PRODUCTION;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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