learning about a new technology pineapple in ghana this paper investigates the role of social learning in the diffusion of a new agri cultural technology in ghana we use unique data on farmers communication patterns to define each individual s information neighborhood conditional on many potentially confounding variables we find evidence that farmers adjust their inputs to align with those of their information neighbors who were surpris ingly successful in previous periods the relationship of these input adjustments to experience further indicates the presence of social learning in addition applying the same method to input choices for another crop of known technol ogy correctly indicates an absence of social learning effects jel d83 013 033 q16

the consequences of doubling the minimum wage the case of indonesia minimum wages in indonesia were tripled in nominal terms and doubled in real terms in the first half of the 1990s the author evaluates the effects of this hike on wage earnings wage employment and investment after describing indonesia s minimum wage policy and surveying the literature on the effects of minimum wages the author applies relatively simple statistical tools to individual and aggregate data he visually inspects the wage distribution for full time laborers and employees to assess the extent of compliance with minimum wages he uses regression analysis involving minimalist specifications and data aggregated by province to estimate the elasticity of wage earnings wage employment and investment with respect to the minimum wage a wide dispersion in the ratio of minimum wages to labor productivity across the 27 indonesian provinces can be used to identify the effects of the minimum wage the results suggest that minimum wages have a moderate effect on outcomes in indonesia s labor market taken at face value these results imply that doubling the minimum wage led to a 10 percent increase in average wages a 2 percent decrease in wage employment and a 5 percent decrease in investment the disemployment effect appears to be considerable in small firms but employment may actually increase in large firms

optimal auction with resale this paper investigates the design of seller optimal auctions when winning bidders can attempt to resell the good in that case the optimal allocation characterized by myerson 1981 cannot be achieved without resale i find a sufficient and necessary condition for sincere bidding given the possibility of resale in two bidder cases i prove that the myerson allocation can be achieved under standard conditions supplemented with two assumptions with three or more bidders achieving the myerson allocation is more difficult i prove that it can be implemented in special cases in those cases the myerson allocation is generated through a sequence of resale auctions each optimally chosen by a reseller

a mechanism design approach to ranking asymmetric auctions i propose a new mechanism design approach to the problem of ranking standard auctions with two heterogeneous bidders a key feature of the approach is that it may be possible to rank two auctions even if neither dominates the other for all combinations of types the approach simplifies the analysis and unifies results in the existing literature roughly speaking the first price auction is more profitable than the second price auction when the strong bidder s distribution is flatter and more disperse than the weak bidder s distribution applications include auctions with one sided externalities moreover contrary to previous work reserve prices are easily handled finally the method can be extended to some environments with many bidders

the impact of minimum wages on employment in a low income country a quasi natural experiment in indonesia the extensive literature on the employment impact of minimum wages has focused heavily on industrialized nations and very little on the developing world despite the importance of minimum wages in many low income countries one such country indo nesia was the setting for an unusual quasi natural experiment not only did minimum wages in indonesia increase sharply between 1990 and 1996 but the resultant increment in average wages varied markedly across different areas in greater jakarta the authors use household level labor market data to determine the extent of compliance with the legislation then estimate the employment impact in the clothing textiles footwear and leather industries based on a census of all large and medium sized establishments the evidence suggests that there was no negative employment impact for large establish ments either foreign or domestic but that workers in smaller domestic establishments may have suffered job losses as a result of minimum wage increases

credible research designs for minimum wage studies a response to neumark salas and wascher the authors assess the critique by neumark salas and wascher 2014 of minimum wage studies that found small effects on teen employment data from 1979 to 2014 contradict nsw the authors show th

decomposing household professional and market forecasts on inflation a dynamic factor model analysis a dynamic factor model with stochastic volatility is used to investigate the relationships between three alternative measures of inflation expectations the results show evidence of both a common time varying trend and a common transitory component between inflation and short term inflation expectations from households professionals and markets while the common time varying trend has declined in both level and volatility since the early 1980s it was found that consumer expectations are disproportionately influenced by the visibility of prices of select few goods roughly speaking a 1 point increase in food and energy prices leads to about 1 3 point increase in consumer forecasts of inflation in terms of policymaking this finding suggests that stability in highly visible prices can moderate inflation in a meaningful way

effective use of survey information in estimating the evolution of expected inflation the evolution of the term structure of expected u s inflation is modeled using survey data to provide timely information on structural change not contained in lagged inflation data to capture shifts in subjective perceptions the model is adaptive to long horizon survey expectations however even short horizon survey expectations inform shifting endpoint estimates that capture the lag between inflation and the perceived inflation target which anchors inflation expectations results show movements of the perceived target are an important source of inflation persistence and suggest historical u s monetary policy was not fully credible for much of the postwar sample

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

how do firms form their expectations new survey evidence author s coibion o gorodnichenko y kumar s abstract 2018 american economic association all rights reserved we survey new zealand firms and document novel facts about their macroeconomic beliefs there is widespread dispersion in beliefs about past and future macroeconomic conditions especially inflation this dispersion in beliefs is consistent with firms incentives to collect and process information using experimental methods we find that firms update their beliefs in a bayesian manner when presented with new information about the economy and that changes in their beliefs affect their decisions inflation is not generally perceived as being important to business decisions so firms devote few resources to collecting and processing information about inflation

optimal bidding in auctions from a game theory perspective abstract the game theoretic perspective in auction bidding has provided a powerful normative framework for the analysis of auctions and it has generated an impressive volume of research contributions tracing this research we review key recent advances which have greatly expanded our understanding of the operation of auctions and produced a more accurate analysis of mechanism design and optimal bidding we follow various experimental studies which have shown that the predictive power of auction theory remains in many cases limited for this reason we concentrate on research themes which enhance the applicability of auction theory leading to more realistic descriptions of bidding behaviors we identify important innovations which expand the environment of auction bidding and carry us beyond rational decision making we conclude providing directions of future research and discussing their implications

contracting and information sharing under supply chain competition we investigate contracting and information sharing in two competing supply chains each consisting of one manufacturer and one retailer the two supply chains are identical except they may have di

the consequences of child market work on the growth of human capital summary the paper measures the effect of child market work on the long term growth of human capital focusing on the output of the human capital production mathematics skills cognitive skills pulmonary function and educational attainment our full sample is drawn from a rich longitudinal dataset indonesia family life survey ifls we address endogeneity of child market work using provincial legislated minimum wage as the instrument our instrumental variable estimation shows that child labor negatively affects mathematics skills and pulmonary function but not cognitive skills and educational attainment we find heterogeneities in type of work those who work outside of family business have lower educational attainment than those working for family business

design competition through multidimensional auctions this article studies design competition in government procurement by developing a model of two dimensional auctions wherefirms bid on both price and quality and bids are evaluated by a scoring rule designed by a buyer three auction schemes first score second score and second preferred offer are introduced and related to actual practices if the buyer can commit to a scoring rule in his best interest the resulting optimal scoring rule underrewards quality relative to the buyer s utility function and implements the optimal outcome for the buyer underfirst and second score auctions absent the commitment power the onlyfeasible scoring rule is the buyer s utility function under which 1 all three schemes yield the same expected utility to the buyer and 2 first and second score auctions induce the first best level of quality which turns out to be excessive from the buyer s point of view

did henry ford pay efficiency wages we examine henry ford s introduction of the five dollar day in 1914 in an effort to evaluate the relevance of efficiency wage theories of wage and employment determination we conclude that the ford experience strongly supports the relevance of these theories ford s decision to increase wages dramatically is most plausibly the consequence of labor problems of the kind efficiency wage theorists stress the structure of the five dollar day program is consistent with the predictions of efficiency wage theories there is vivid evidence that the introduction of the five dollar day resulted in substantial queues for ford jobs significant increases in ford productivity and profits accompanied the new regime

multinationals and anti sweatshop activism during the 1990s anti sweatshop activists campaigned to improve conditions for workers in developing countries this paper analyzes the impact of antisweatshop campaigns in indonesia on wages and employment identification is based on comparing the wage growth of workers in foreign owned and exporting firms in targeted regions or sectors before and after the initiation of antisweatshop campaigns we find the campaigns led to large real wage increases for targeted enterprises there were some costs in terms of reduced investment falling profits and increased probability of closure for smaller plants but we fail to find significant effects on employment jel f23 j31 j81 l67 o14 o15

the profits of power land rights and agricultural investment in ghana we examine the impact of ambiguous and contested land rights on investment and productivity in agriculture in akwapim ghana we show that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights and that as a consequence they invest more in land fertility and have substantially higher output the intensity of investments on different plots cultivated by a given individual corresponds to that individual s security of tenure over those specific plots and in turn to the individual s position in the political hierarchy relevant to those specific plots

heterogeneous effects of imperfectly enforced minimum wages in low wage labor markets abstract we present minimum wage effects across different enforcement regimes exploiting state time variation and policy discontinuities at contiguous districts across state borders in india we show that the effect of minimum wages on wages and employment significantly increases with an increase in enforcement in weak enforcement regimes estimated wage effects are negligible and employment effects are negative or null in stricter regimes wage effects are positive and strong and employment effects are positive or null in most specifications these results are consistent with theories on imperfect enforcement in monopsonistic labor markets and are robust to alternative definitions of enforcement and employment and employing instrumental variables for enforcement

does entry regulation hinder job creation evidence from the french retail industry are product market and entry regulation key sources of low employment growth in many european countries we investigate this question in the context of the french retail trade industry since 1974 approval by regional zoning boards has been required for the creation or extension of any large retain store in france we exploit a unique database that provides time and region specific variation in boards approval decisions we show that stronger deterrence of entry by the boards increased retailer concentration and slowed down employment growth in france

assessing inflation expectations anchoring for heterogeneous agents analysts businesses and trade unions forecasts of agents who are actively involved in the setting of prices and wages are less readily available than those of professional analysts but may be more relevant for understanding inflation

higher wages for sustainable development employment and carbon effects of paying a living wage in global apparel supply chains abstract in this paper we explore how paying a living wage in global supply chains might affect employment and carbon emissions sustainable development goals 8 and 13 previous work has advocated using wage increases for poorer workers to increase prices for wealthier consumers thereby reducing consumption and associated environmental damage however the likely effects of such an approach remain unclear using an input output framework extended with income and demand elasticities we estimate the employment and carbon effects of paying a living wage to brazilian russian indian and chinese bric workers in the western european clothing supply chain we find negligible effects on carbon emissions but a substantial increase in bric employment under 3 scenarios of consumer behaviour changes in western european consumption lead to small decreases in global carbon emissions and bric employment however the increase in bric wages increases demand in bric this increased demand increases production which largely cancels out the carbon savings and generates net increases in bric employment we conclude by arguing that paying higher wages in global supply chains represents a good but not sufficient step toward achieving the sustainable development goals

pricing in a supply chain for auction bidding under information asymmetry abstract we examine a supply chain in which a manufacturer participates in a sealed bid lowest price procurement auction through a distributor this form of supply chain is common when a manufacturer is active in an overseas market without establishing a local subsidiary to gain a strategic advantage in the division of profit the manufacturer and distributor may intentionally conceal information about the underlying cost distribution of the competition in this environment of information asymmetry we determine the equilibrium mark up the ex ante expected mark up and expected profit of the manufacturer and the equilibrium bid of the distributor in unilateral communication we demonstrate the informed agent s advantage resulting to higher mark up under information sharing we show that profit is equally shared among the supply chain partners and we explicitly derive the mark up when the underlying cost distribution is uniform in 0 1 the model and findings are illustrated by a numerical example

social articulation as a condition for equitable growth abstract a formal model is developed to establish the structural conditions that result in growth being progressive or regressive on the personal distribution of income these conditions include 1 intersectoral investment priorities between wage goods and luxuries and 2 the state of the levels and distribution of incomes which determines the social origin of demand for different sectors of the economy the particular combinations of investment and income structures that result in equalizing social articulation or unequalizing growth social disarticulation are derived we show empirically that the structural conditions that allowed rapid but unequalizing growth in brazil between 1968 and 1977 were those of social disarticulation

asymmetric auctions with resale we study first and second price auctions with resale in a model with indepen dent private values with asymmetric bidders the resulting inefficiencies create a motive for post auction trade which in our model takes place via monopoly pricing the winner makes a take it or leave it offer to the loser we show a a first price auction with resale has a unique monotonic equilibrium and b with resale the expected revenue from a first price auction exceeds that from a second price auction the inclusion of resale possibilities thus permits a gen eral revenue ranking of the two auctions that is not available when these are excluded jel d44

macroeconomic expectations of households and professional forecasters economists have long emphasized the importance of expectations in determining macroeconomic outcomes yet there has been almost no recent effort to model actual empirical expectations data instead m acroeconomists usually simply assume that expectations are rational this paper shows that while empirical household expectations are not rational in the usual sense expectational dynamics are well captured by a model in which households views derive from news reports of the views of professional forecasters which in turn may be rational the model s estimates imply that people only occasionally pay attention to news reports this inattention generates stickyness in aggregate expectations with important macroeconomic consequences

the organization of supplier networks effects of delegation and intermediation in a one principal two agent model with adverse selection and collusion among agents we show that delegating to one agent the right to subcontract with the other agent always earns lower profit for the principal compared with centralized contracting delegation to an intermediary is also not in the principal s interest if the agents supply substitutes it can be beneficial if the agents produce complements and the intermediary is well informed

labour market responses to immigration evidence from internal migration driven by weather shocks we study the labour market impact of internal migration in indonesia by instrumenting migrant flows with rainfall shocks at the origin area estimates reveal that a one percentage point increase in the share of migrants decreases income by 0 97 and reduces employment by 0 24 percentage points these effects are different across sectors employment reductions are concentrated in the formal sector while income reduction occurs in the informal sector negative consequences are most pronounced for low skilled natives even though migrants are systematically highly skilled we suggest that the two sector nature of the labour market may explain this pattern

tracing the impact of large minimum wage changes on household welfare in indonesia abstract minimum wage legislation has been introduced and expanded in many developed and developing countries in the hope that it would improve the living standards of the poor and reduce inequality this study examines the impact of large minimum wage changes in indonesia the results indicate serious limitations of the minimum wage for improving living standards and reducing inequality

can minimum wages cause a big push evidence from indonesia big push models suggest that local product demand can create multiple labor market equilibria one featuring high wages formalization and high demand and one with low wages informality and low demand i demonstrate that minimum wages may coordinate development at the high wage equilibrium using data from 1990s indonesia where minimum wages increased in a varied way i develop a difference in spatial differences estimator which weakens the common trend assumption of difference in differences estimation reveals strong trends in support of a big push formal employment increases and informal employment decreases in response to the minimum wage local product demand also increases and this formalization occurs only in the non tradable industrializable industries suggested by the model while employment in tradable and non industrializable industries also conforms to model predictions

behavioral models for first price sealed bid auctions with the one shot decision theory abstract we build an auction model with the one shot decision theory which describes the process of a bidder deciding his her bidding price in first price sealed bid auctions the decision making procedure involves two steps first for each of his her possible bidding prices the bidder examines every possible highest bidding price provided by the other bidders and chooses one as a focus point of this bidding price of him her then the bidder determines such a bidding price as the optimal one that generates the best outcome when its focus point occurs the optimal bidding price can be obtained and two common phenomena in auction markets throwing away and overbidding are well explained

price quoting strategies of an upstream supplier this paper studies an upstream supplier who quotes prices for a key component to multiple sellers that compete for an end buyer s indivisible contract at most one of the supplier s quotes may result in downstream contracting and hence produce revenue for her we characterize the supplier s optimal price quoting strategies and show that she will use one of two possible types of strategies with her choice depending on the sellers profit potentials relative to their uncertainties secure whereby she will always have business or risky whereby she may not have business addressing potential fairness concerns we also study price quoting strategies in which all sellers receive equal quotes finally we show that the supplier s optimal mechanism resembles auctioning a single quote among the sellers this paper can assist upstream suppliers in their pricing decisions and provides general insights into multitier supply chains pricing dynamics this paper was accepted by martin lariviere operations management