Contestable licensing

Zvika Neeman*, Gerhard Oskar Orosel

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We analyze a model of repeated franchise bidding for natural monopoly with contestable licensing - a franchisee holds an (exclusive) license to operate a franchise until another firm offers to pay more for it. In a world where quality is observable but not verifiable, the simple regulatory scheme we describe combines market-like incentives with regulatory oversight to generate efficient outcomes.

Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalContributions to Economic Analysis and Policy
Issue number1
StatePublished - 2004
Externally publishedYes


  • Contestable markets
  • Franchise bidding
  • Natural monopoly
  • Quality
  • Regulation


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