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In financial markets, the more complex the instrument, and the more uncertain the outlook, the greater the likely range of views of common value. More often, trading puts assets in the hands of those who think the assets are more valuable than they really are.
Most bad economic policies can be abandoned, but the harmful effects of restrictive licensing systems are usually irreversible. By illustrating the flaws of taxi regulation, John explains why governments and licensing authorities should think twice before being caught in a transitional gains trap.
The alleged success of the British mobile phone auctions in raising revenue for the government poses many questions about the desirability of licences and auctions in general. John's article examines the underlying logic of auctions and suggests that the current enthusiasm may be misguided
Should scarce assets be allocated by auction to the highest bidder or by a beauty contest of suitable applicants? From FIFA's decision on where to hold the World Cup to the ways in which European governments assign mobile phone licences, the choice of process is the economic issue of the moment.