6 de January del 2021
We study revenue, entry, and possible collusion outcomes in the Chilean fishery with the longest record of individual transferable catch quotas allocated via public auctions. We examine 18 annual multi-object auctions and two different auction-designs at work. Based on results from a numerically calibrated auction model and econometric estimates, we claim that the repeated use of sequential oral auctions was particularly prone to bid-rigging and facilitated entry deterrence. Yet, efficient entry was possible thanks to fully transferable quota rights. From these results, we highlight two conclusions: Firstly, when selling multiple production rights at a highly concentrated industry, repeatedly over time, auctioneers should avoid using sequential, English auctions. Secondly, transferable production rights help overcome inefficiencies that can arise from design flaws in the chosen mechanism for allocating those rights.