Document Type

Honors Project - Open Access

Abstract

One tool used to allocate resources in markets is the auction. If this mechanism is applied in a situation characterized by large numbers of buyers and sellers (to avoid the possibility of single agent having the power to impact prices) then efficient allocation of resources should result, with important implications for welfare maximization. This paper looks at the essentially-deregulated taxi system in place in Yaoundé, Cameroon, which has endogenously developed around a bidding system. The "large number" criterion holds, as does that of a relatively low degree of informational asymmetry between buyer and seller, making the city an interesting case study for the effectiveness of the auction mechanism. Using original survey data collected on taxi trips, I estimate the Price Elasticity of Waiting Time in Yaoundé. These results may inform current understandings of efficient allocation structures of transportation industries and beyond.

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