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A Binary Conflict Ascending Price (BICAP) Mechanism for the Decentralized Allocation of the Right to Use Railroad Tracks

Brewer, Paul J. and Plott, Charles R. (1995) A Binary Conflict Ascending Price (BICAP) Mechanism for the Decentralized Allocation of the Right to Use Railroad Tracks. Social Science Working Paper, 887. California Institute of Technology , Pasadena, CA. (Unpublished)

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The questions posed for study are motivated by controversies over how Sweden might change from a centralized system of railroad management to a decentralized system. The central rail administration, Banverk, will retain ownership and maintenance responsibility of the tracks, but will sell access to the tracks to private firms. The questions are about the mechanism that might accomplish this task. Parties to the controversy have claimed that the technical aspects of networks will, as a matter of principle, preclude the operation of any decentralized method. This paper explores the properties of a mechanism developed as a challenge to that claim. The mechanism is examined in the context of a testbed experimental environment that contains many potential problem causing elements. In the tests performed the mechanism operated to efficiently allocate access to the network and it did so for behavioral reasons that are understandable in terms of theory. The paper closes with suggestions for further study of environments that might present additional challenges to a mechanism.

Item Type:Report or Paper (Working Paper)
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Additional Information:Revised version. Original dated to June 1994. The financial support of the National Science Foundation and the Caltech Laboratory for Experimental Economics and Political Science is gratefully acknowledged. We wish to give a special acknowledgment to Jan-Eric Nilsson of the Center for Research in Transportation and Society, Borlange, Sweden for the information he provided on the industrial organization of railroads in Sweden and the current political environment. The comments of John Ledyard. Richard McKelvey, Scott Page. and Dave Porter have also been very helpful in the development of this project. Published as Brewer, Paul J., and Charles R. Plott. "A binary conflict ascending price (BICAP) mechanism for the decentralized allocation of the right to use railroad tracks." International Journal of Industrial Organization 14, no. 6 (1996): 857-886.
Group:Social Science Working Papers
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Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Subject Keywords:Experiment, Privatization, Auctions
Series Name:Social Science Working Paper
Issue or Number:887
Record Number:CaltechAUTHORS:20170822-150740999
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80699
Deposited By: Jacquelyn Bussone
Deposited On:23 Aug 2017 17:17
Last Modified:03 Oct 2019 18:34

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