Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas
The authors analyze the possibility of tradeoffs between efficiency and equity as well as the possibility of distributional conflicts in the context of renegotiation of infrastructure contracts in developing countries. To do so, they present a mode...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/11/1631784/concession-contract-renegotiations-some-efficiency-versus-equity-dilemmas http://hdl.handle.net/10986/19495 |
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okr-10986-194952021-04-23T14:03:43Z Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas Estache, Antonio Quesada, Lucia AUCTIONS BID BIDDERS BIDDING COLLUSION COMPETITIVE MARKETS CONSUMERS DEMAND ELASTICITY ELASTICITY EQUILIBRIUM INCREASING RETURNS INCREASING RETURNS TO SCALE MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET CONDITIONS MONOPOLY NASH EQUILIBRIUM OPTIMIZATION PRICE CHANGES PRICE DECREASES PRICE INCREASES PRIVATE INFORMATION PRODUCTION TECHNOLOGY SURPLUS TOTAL COSTS TRADEOFFS TURNOVER UTILITY FUNCTION UTILITY MAXIMIZATION CONCESSIONS CONTRACT NEGOTIATION PROCUREMENT EFFICIENCY EQUITY TRADEOFFS SERVICE DELIVERY The authors analyze the possibility of tradeoffs between efficiency and equity as well as the possibility of distributional conflicts in the context of renegotiation of infrastructure contracts in developing countries. To do so, they present a model in which contracts are awarded by auctioning the right to operate an infrastructure service to a private monopoly, and consider the possibility of renegotiation. To identify the potential sources of tradeoffs, they track the possible outcomes of different renegotiation strategies for the monopoly running the concession and for the two groups of consumers-rich and poor-who alternate in power according to a majority voting rule. Among the model's most important policy implications is this: if having firm-driven renegotiations is a major concern, efficiency should not be the only consideration in selecting an operator. Indeed, consumers may want to award the concession to a less efficient firm if that would reduce the probability of renegotiation, since a lower probability of firm-driven renegotiations (due to demand shocks, for example) is associated with higher welfare for all service users. 2014-08-20T17:54:46Z 2014-08-20T17:54:46Z 2001-11 http://documents.worldbank.org/curated/en/2001/11/1631784/concession-contract-renegotiations-some-efficiency-versus-equity-dilemmas http://hdl.handle.net/10986/19495 English en_US Policy Research Working Paper;No. 2705 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AUCTIONS BID BIDDERS BIDDING COLLUSION COMPETITIVE MARKETS CONSUMERS DEMAND ELASTICITY ELASTICITY EQUILIBRIUM INCREASING RETURNS INCREASING RETURNS TO SCALE MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET CONDITIONS MONOPOLY NASH EQUILIBRIUM OPTIMIZATION PRICE CHANGES PRICE DECREASES PRICE INCREASES PRIVATE INFORMATION PRODUCTION TECHNOLOGY SURPLUS TOTAL COSTS TRADEOFFS TURNOVER UTILITY FUNCTION UTILITY MAXIMIZATION CONCESSIONS CONTRACT NEGOTIATION PROCUREMENT EFFICIENCY EQUITY TRADEOFFS SERVICE DELIVERY |
| spellingShingle |
AUCTIONS BID BIDDERS BIDDING COLLUSION COMPETITIVE MARKETS CONSUMERS DEMAND ELASTICITY ELASTICITY EQUILIBRIUM INCREASING RETURNS INCREASING RETURNS TO SCALE MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET CONDITIONS MONOPOLY NASH EQUILIBRIUM OPTIMIZATION PRICE CHANGES PRICE DECREASES PRICE INCREASES PRIVATE INFORMATION PRODUCTION TECHNOLOGY SURPLUS TOTAL COSTS TRADEOFFS TURNOVER UTILITY FUNCTION UTILITY MAXIMIZATION CONCESSIONS CONTRACT NEGOTIATION PROCUREMENT EFFICIENCY EQUITY TRADEOFFS SERVICE DELIVERY Estache, Antonio Quesada, Lucia Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| relation |
Policy Research Working Paper;No. 2705 |
| description |
The authors analyze the possibility of
tradeoffs between efficiency and equity as well as the
possibility of distributional conflicts in the context of
renegotiation of infrastructure contracts in developing
countries. To do so, they present a model in which contracts
are awarded by auctioning the right to operate an
infrastructure service to a private monopoly, and consider
the possibility of renegotiation. To identify the potential
sources of tradeoffs, they track the possible outcomes of
different renegotiation strategies for the monopoly running
the concession and for the two groups of consumers-rich and
poor-who alternate in power according to a majority voting
rule. Among the model's most important policy implications is
this: if having firm-driven renegotiations is a major
concern, efficiency should not be the only consideration in
selecting an operator. Indeed, consumers may want to award
the concession to a less efficient firm if that would reduce
the probability of renegotiation, since a lower probability
of firm-driven renegotiations (due to demand shocks, for
example) is associated with higher welfare for all service users. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Estache, Antonio Quesada, Lucia |
| author_facet |
Estache, Antonio Quesada, Lucia |
| author_sort |
Estache, Antonio |
| title |
Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| title_short |
Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| title_full |
Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| title_fullStr |
Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| title_full_unstemmed |
Concession Contract Renegotiations : Some Efficiency versus Equity Dilemmas |
| title_sort |
concession contract renegotiations : some efficiency versus equity dilemmas |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/11/1631784/concession-contract-renegotiations-some-efficiency-versus-equity-dilemmas http://hdl.handle.net/10986/19495 |
| _version_ |
1764439876553408512 |