Rent at Public Markets

At the Queen Victoria Market, an immense city-run collection of stalls and shops in Melbourne, Australia, a fishmonger at a prime corner is paying $5,500 per month to the City to operate there.  Since other fishmongers pay less, much of this payment is economic rent — payment for the visibility/access at this corner. But is the City extracting all the rent, or is it giving the fishmonger a good deal? 

This fishmonger has been in business at this location for a very long time.  That fact suggests that at most the City is not overcharging him, and perhaps it isn’t even extracting all the rent.  Whenever many public lessees in competitive businesses stay in business a long time, the public agency is probably granting them excess profits — at the public’s expense.

Is an Auction the Best Way to Solve the Roommate/Rent Dilemma?

We've blogged before about the very common roommate/rent dilemma -- that is, how to fairly split rent among roommates given that different rooms have different features. A reader named Michael Jancsy writes in with an auction solution and a request for feedback:

I recently designed an auction website [called "The Rent Is Too Damn Fair"] to help friends split apartments ... The auction works by allowing each roommate to bid on each room in an apartment, and then identifies the permutation of roommates to rooms with the largest consumer surplus (sum of all bids minus rent paid to landlord) to decide who should live in what room. Each person's rent is then calculated by dividing the surplus evenly over the occupants, so that the difference between a person’s bid and the rent paid is the same for each person.