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Auctions with and without the Right of First Refusal and National Park Service Concession Contracts
Author(s) -
Chouinard Hayley H.
Publication year - 2005
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2005.00795.x
Subject(s) - common value auction , bidding , service (business) , business , revenue , national park , quality (philosophy) , microeconomics , economics , marketing , finance , geography , archaeology , philosophy , epistemology
The National Park Service has struggled to improve the quality of service provided by concessioners for decades. To address these concerns, the Park Service eliminated the right of first refusal from the largest revenue‐generating concession contract auctions beginning in 2000. This article provides models of concession contract auctions with and without the right of first refusal. The optimal bidding strategies and expected level of service are found. The results confirm the auction without the right of first refusal leads to bids that include a higher level of service.