optimal advertising of auctions we study a symmetric independent private values auction model where the revenue maximizing seller faces a cost cn of attracting n bidders to the auction if the distribution of valuations possesses an increasing failure rate ifr the seller overinvests in attracting bidders compared to the social optimum conversely if the distribution is dfr the seller underinvests compared to the social optimum if the distribution of valuations becomes more dispersed both a revenue and a welfare maximizing seller attract more bidders

the economic growth effect of offshore banking in host territories evidence from the caribbean summary following the success of renowned caribbean offshore centers several small islands have enacted offshore banking policies as a strategy for increasing economic growth several empirical studies have assessed the growth effect of such policies but none accounts for sector size when estimating its growth impact this study contributes to this literature by estimating the magnitude of offshore activity in each territory and using this estimate as a continuous variable in an economic growth model the results provide support for the hypothesis that facilitating offshore banking stimulates economic growth in host islands and that the benefit is proportional to sector size

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

participation and welfare in auctions with default abstract in an auction with costly participation we show that bidder default may cause social welfare loss through i the possibility of no trade and ii the under participation of bidders in equilibrium we also provide closed form solutions to the model

money laundering as a crime in the financial sector a new approach to quantitative assessment with an application to italy this study provides an answer to the question of how much cash deposited via a financial institution can be traced back to criminal activities by developing a new approach to measure money laundering and proposing an application to italy we define a model of cash in flows on current accounts considering besides dirty money to be laundered also the legal motivations to deposit cash and the role of the shadow economy we find that the average amount of cash laundered in italy is around 6 of gdp these findings are coherent with estimates of the nonobserved economy obtained in previous studies

optimal auctions revisited in symmetric privately known values oral auctions with costly entry for bidders the seller can do no better than by committing ex ante to a reservation price and entry fees or subsidies which result in no fewer and at most one more bidders than a reservation price equal to the seller s value would in the absence of entry fees or subsidies journal of economic literature classification numbers d44 c72

ranking equilibrium competition in auctions with participation costs this paper studies the degrees of equilibrium competition in three common forms of auctions with costly participation and shows that when bidders valuation distribution is concave there is a simple condition to rank the equilibrium competition of those auctions it also investigates how the results are related to stochastic ordering of bidders valuation distributions and provides some illustrative examples

agriculture in transition economies from common heritage to divergence the 23 former socialist countries in central and eastern europe cee and the commonwealth of independent states cis started the transition in 1989 1990 from a common institutional and organizational heritage represented by the soviet agricultural model despite the common heritage in agriculture the reform policies in cee and cis diverged from the start as significant differences emerged between the two groups of countries in legal attitudes to private land ownership transferability of land the extent of agricultural privatization and individualization and restructuring of farms this divergence in the implementation of agricultural reform has led to divergence in standard development measures the cee countries are outperforming the cis countries by growth in gdp and agricultural product since 1992 the productivity of agricultural labor in cee is generally increasing and in cis it is decreasing while the cis countries at best can be characterized as reluctant reformers the cee countries have achieved significantly higher levels of economic and institutional reform better performance in cee is associated with greater readiness of the governments in these countries to implement a comprehensive package of economic and social reform policies including more radical land reform and deeper individualization and restructuring of agriculture

cross border tax evasion after the common reporting standard game over back in 2013 the automatic exchange of information aeoi was endorsed as the prevailing universal solution to fight cross border tax evasion in this regard the oecd launched a global standard for the aeoi the common reporting standard crs currently around 100 jurisdictions have committed to implement it into respective national laws by 2018 in this study we analyze the impact of the crs on cross border tax evasion using a difference in difference research design by considering a period of four years 2014 2017 results suggest that the crs induced a reduction of 14 in cross border deposits parked in offshore locations for tax evasion purposes moreover such wealth and related income has not been repatriated but rather a new location to avoid domestic tax obligations has emerged more specifically upon the crs implementation at domestic level the united states u s i e the only major economy in the world which so far did not commit to the crs seems to emerge as a potentially attractive location for cross border tax evasion

equilibrium bid functions for auctions with an uncertain number of bidders abstract the number of rivals may be unknown when a bidding strategy is formulated in an auction in a symmetric model with risk neutral bidders holding independent information we obtain explicit equilibrium bidding functions for first price and second price auctions with uncertainty about the number of rivals five auctions are revenue equivalent first price and second price auctions each with the number of bidders known or uncertain and english auctions

anonymous shell companies a global audit study and field experiment in 176 countries to test whether firms behave consistently with international law prohibiting anonymous incorporation we conducted a global audit study and field experiment using data from 1639 incorporation firms in 176 countries we requested anonymous incorporation and randomly assigned references to international law threat of penalties norms of appropriate behavior or a placebo we find a substantial number of firms willing to flout international standards and show that those in oecd countries proved significantly less compliant with rules than in developing countries or tax havens firms in tax havens displayed significantly greater compliance and were sensitive to experimental interventions invoking international law

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

equilibria in first price auctions with participation costs this paper characterizes the equilibria of first price auctions with participation costs in the independent private values environment bidders use cutoff strategies to decide whether they will participate in the auction it is shown that when bidders are homogeneous there always exists a unique symmetric equilibrium and further there is no other equilibrium when valuation distribution functions are inelastic when distribution functions are elastic at the symmetric equilibrium there exists an asymmetric equilibrium inelasticity elasticity includes concavity convexity of distribution functions as a special case we find similar results when bidders are heterogeneous

shopping for anonymous shell companies an audit study of anonymity and crime in the international financial system the last few years have seen an international campaign to ensure that the world s financial and banking systems are transparent meaning that every actor and transaction within the system can be traced to a discrete identifiable individual i present an audit study of compliance with the prohibitions on anonymous shell companies in particular i describe my attempts to found anonymous corporate vehicles without proof of identity and then to establish corporate bank accounts for these vehicles transactions processed through the corporate account of such a shell company become effectively untraceable and thus very useful for those looking to hide criminal profits pay or receive bribes finance terrorists or escape tax obligations i solicited offers of anonymous corporate vehicles from 54 different corporate service providers in 22 different countries and collated the responses to determine whether the existing legal and regulatory prohibitions on anonymous corporate vehicles actually work in practice to foreshadow the results it seems that small island offshore centers may have standards for corporate transparency and disclosure that are higher than major oecd economies like the united states and the united kingdom

tax evasion in new disguise examining tax havens international bank deposits abstract recent efforts to reduce international tax evasion focus on information exchange with tax havens using bilateral bank data for 1397 countrypairs in a balanced quarterly panel from 2003 i to 2017 iv we first show that information on request treaties with tax havens reduce bank deposits in tax havens by 27 5 second also deposits from tax havens in high tax countries decline after such treaties are signed giving authorities a second angle to detect tax evasion both reactions dissipate overt time and treaties signed after 2010 trigger no further reactions these results cannot be explained by deposit shifting alone and we find no evidence of transitioning into legality third recent policy initiatives based on the automatic exchange of bank information lead to very similar initial reactions as earlier treaties consistent with adjustments on the part of tax evaders this suggests that tax evaders adapt to established information exchange treaties by using new disguises to hide their true income and react again to new measures these results cast doubt on the effectiveness of current forms of information exchange to tackle international tax evasion

the economics of agricultural decollectivization in east central europe and the former soviet union 1989 include both the privatization of agricultural production assets and the restructuring of state and collective farms farm restructuring and more specifically the breakup of large scale agricultural production units into individually operated farms a process we define as decollectivization differ considerably for the various ece and fsu countries differences in decollectivization can be observed across countries between regions within a country and over time we argue that these differences are not random this article identifies the factors that affect the decollectivization process and shows how they are consistent with empirically observed differences in agricultural decollectivization in ece and fsu countries the decollectivization process is a consequence of the decision of collective farm members to leave the collective production framework and start up individual farms factors affecting this decision are the expected productivity and profitability of individual farming relative to collective farming and the costs for individuals to leave the collective farm and start up an individual farm these costs are affected by land reform privatization and decollectivization regulations the relative productivity of individual versus collective farming depends on the distribution of collective farmers productivity the prereform average collective farm productivity and the advantages and disadvantages of individual farming compared to collective farming the literature on decollectivization identifies both advantages and disadvantages in collective production some of which would not extend beyond the transition period disadvantages include high transaction costs associated with the monitoring of labor and inefficiencies due to the right of

optimal search auctions abstract we study the design of profit maximizing single unit auctions under the assumption that the seller needs to incur costs to contact prospective bidders and inform them about the auction with independent bidders types and possibly interdependent valuations the seller s problem can be reduced to a search problem in which the surplus is measured in terms of virtual utilities minus search costs compared to the socially efficient mechanism the optimal mechanism features fewer participants longer search conditional on the same set of participants and inefficient sequence of entry

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

land market imperfections and agricultural policy impacts in the new eu member states a partial equilibrium analysis this article analyses how transaction costs and imperfect competition in the land market affect the welfare effects of agricultural subsidies in the new eastern member states of the european union benefits of land subsidies end up with landowners in new eastern member states also with imperfections in the new eastern member states land markets with unequal access to subsidies small tenant farmers may even lose out from the subsidies decoupling of payments shifts policy rents to farmers but constrains productivity enhancing restructuring using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency

overcoming supply chain failure in the agri food sector a case study from moldova abstract successor states of the soviet union have witnessed substantial falls in agri food production since the break up of the ussr supply chain disruption has been a major factor in this decline this paper identifies how asymmetric information between farmers and processors led to market failure in moldova and how one dairy company has attempted to overcome such a crisis the case study company has invested in better monitoring of milk quality to effectively supervise transactions milk production is a major source of income for rural households who sell to dairies via village collecting stations the costs of monitoring milk quality to avoid market failure from adverse selection are significant preventing small scale producers being marginalised from dairy supply chains is an important factor in safeguarding and improving rural livelihoods

equilibria in second price auctions with participation costs abstract we investigate equilibria of sealed bid second price auctions with bidder participation costs in the independent private values environment we focus on equilibria in cutoff strategies participate and bid the valuation iff it is greater than the cutoff since if a bidder finds it optimal to participate she cannot do better than bidding her valuation when bidders are symmetric concavity strict convexity of the cumulative distribution function from which the valuations are drawn is a sufficient condition for uniqueness multiplicity within this class we also study a special case with asymmetric bidders and show that concavity convexity plays a similar role

land rental markets in transition theory and evidence from hungary summary this paper analyzes the determinants of household farms participation in land rental markets in transition countries we derive several hypotheses on the impact of households human capital land endowment land quality and prices transaction costs rural credit and labor market constraints our empirical analysis uses data from a representative survey of more than 1 400 hungarian household farms and hungarian official statistics land rental markets reallocate land to households with better farm management capacities households combine buying and renting of land to extend their farms land ownership is fragmented and land consolidation occurs through renting the domination of corporate farms in some regions restricts households access to land

land reform and farm restructuring what has been accomplished to date the countries of east central europe ece and the former soviet union fsu entered the transition in 1989 1990 with a common heritage in agriculture most land regardless of its ownership was cultivated collectively in large scale farms with thousands of hectares and hundreds of member workers the commercial production from the collective sector was supplemented by subsistence oriented individual agriculture based on rural household plots of less than one hectare product markets and input supply channels were largely controlled by state organizations within an administrative command framework budget constraints virtually did not exist the persistent inefficiency of socialized agriculture was usually attributed to collective production which is rare in countries with a marketoriented economy and to farm sizes that were too large compared to the observed market best practice the strategy of agricultural transition formulated in the early 1990 s accordingly envisaged a transformation from collective to individual agriculture as the ultimate goal individual farmers could form associations to ensure efficient farm services and engage in land transactions to achieve optimal farm sizes pragmatic considerations suggested an intermediate stage involving transition to downsized but still relatively large corporate or cooperative farms based on private ownership of land and assets and with radically modified profit motivated management