Government-sponsored auctions for production rights (e.g., license auctions, privatizations, etc.) shape the industry structure. Are there mechanisms that induce an efficient industry structure (at least when there are no positive costs to public funds)? The answer is “no” whenever firms have private information about both fixed and marginal costs. Our analysis also suggests that the second-bes...

Many studies have shown that commercially-sponsored clinical trials are more likely than publicly-financed trials to produce results that are favorable to the sponsoring firm. There is no research, however, to support the allegation that industry sponsors intentionally design methodologically inferior studies. Rather than empirically determining whether commercially financed research is less so...