@article{weyl2022depreciating,
author = {Weyl, E. Glen and Zhang, Anthony Lee},
title = {Depreciating Licenses},
year = {2022},
month = {August},
abstract = {Many governments assign use licenses for natural resources, such as radio spectrum, fishing rights, and mineral extraction rights, through auctions or other market-like mechanisms. License design affects resource users' investment incentives as well as the efficiency of asset allocation. No existing license design achieves first-best outcomes on both dimensions. Long-term licenses give owners high investment incentives but impede reallocation to high-valued entrants. Short-term licenses improve allocative efficiency but discourage investment. We propose a simple new mechanism, the depreciating license, and we argue that it navigates this trade-off more effectively than existing license designs.},
url = {http://approjects.co.za/?big=en-us/research/publication/depreciating-licenses/},
pages = {422-448},
journal = {American Economic Journal: Economic Policy},
volume = {14},
number = {3},
}