market approval of phytosanitary active substances in europe an empirical duration analysis abstract the aim of this paper is to analyze empirically the main determinants of delays to market approval of active substances in europe an interesting feature of this regulation is that it is based on both a decentralized examination by the rapporteur country and a centralized examination by the european food safety authority efsa our econometric analysis is based on standard survival and competing risks models the data cover 393 active substances reviewed between 1993 and 2013 we show that the review process is affected by regulatory factors the characteristics of the active substances and the characteristics of agri chemical firms log logistic and log normal survival models are the preferred parametric specifications and the results suggest that the hazard function is non monotonic over time

convergence to efficiency in a simple market with incomplete information a model of trade with m buyers and m sellers is considered in which price is set to equate revealed demand and supply in a bayesian nash equilibrium each trader acts not as a price taker but instead misrepresents his true demand supply to influence price in his favor this causes inefficiency we show that in any equilibrium the amount by which a trader misreports is o 1 m and the corresponding inefficiency is o 1 m2 the indeterminacy and the inefficiency that is caused by the traders bargaining behavior in small markets thus rapidly vanishes as the market increases in size

u s trade remedy law and agriculture trade diversion and investigation effects we study u s agricultural antidumping and countervailing duty cases from 1980 to 2005 and gauge the effectiveness of trade remedy law as a form of protection the purpose is to measure the resulting investigation and trade diversion effects previous research on trade in manufactured products has shown that the domestic protection offered by ad and cv duties is largely offset by trade diversion in contrast we find that for agriculture trade diversion is relatively unimportant so ad and cvd cases are very effective forms of protection for u s agriculture les auteurs etudient les cas de tarifs antidumping et de tarifs compensatoires dans l agriculture aux etats unis entre 1980 et 2005 et evaluent l efficience de cette forme de protection l objectif est de mesurer les effets resultant des enquetes et de la diversion de commerce des etudes anterieures sur le commerce de produits manufacturiers ont montre que la protection offerte par ces mesures antidumping et compensatoires etait largement contrebalancee par la diversion de commerce a contrario il appert qu en agriculture la diversion de commerce est relativement peu importante voila qui fait que les mesures antidumping et compensatoires sont des formes de protection efficientes pour l agriculture americaine

applied general equilibrium models of taxation and international trade an introduction and survey we wish to acknowledge the help of three referees and of john pencavel on several earlier drafts as well as the assistance of the modelers whose work is referred to in the paper they corrected our lack of understanding of their work and provided many other helpful comments excellent research and bibliographical assistance have been provided by debbie fretz radwan shaban and janet stotsky helpful comments have been made by charles ballard michael boskin lans bovenberg sylvester damus harvey galper glenn harrison gordon lenjosek jack mutti serena ng t n srinivasan charles stuart and eric toder the authors also acknowledgefinancial support from the national bureau of economic research the national science foundation international business machines and the social sciences and humanities research council ottawa canada

equivalence of auctions and posted prices abstract we determine the equilibrium in two transaction mechanisms auctions and posted prices agents choose whether to participate in markets where trades are consummated by auctions or in markets where sellers post prices we show that the selling mechanisms are practically equivalent previous studies have shown that auction markets emerge as a unique evolutionary stable equilibrium when compared to bargaining markets posted price markets dominate bargaining markets similarly journal of economic literature classification numbers c78 c73 d44

reputation matters spillover effects for developing countries in the enforcement of us food safety measures abstract we use data on us food import refusals to show for the first time that reputational spillovers are important factors in the enforcement of food safety measures the odds of a country experiencing at least one import refusal increase by over 100 if there was a refusal of the same product from a neighboring country in the preceding year similarly the odds of a refusal increase by 62 if there was a refusal of a related product from the same country in the preceding year these findings have important policy implications for exporters of agricultural products particularly in middle income developing countries

social cost of environmental quality regulations a general equilibrium analysis the use of cost benefit analysis by federal regulatory agencies has expanded greatly in scope and sophistication unfortunately agencies continue to employ private cost rather than social cost to evaluate environmental quality regulations furthermore general equilibrium impacts and intertemporal effects of regulations are typically not included in the evaluation in this paper we estimate the social cost of environmental quality regulations mandated by the clean air and clean water acts we construct an econometric general equilibrium model of the united states to demonstrate that social cost estimates diverge sharply from private cost estimates we also demonstrate that general equilibrium impacts are significant and pervasive and that intertemporal effects of the regulations heretofore ignored are significant

auctioning incentive contracts this paper draws a remarkably simple bridge between auction theory and incentive theory it considers the auctioning of an indivisible project among several fi rms the firms have private information about their future cost at th e bidding stage and the selected firm ex post invests in cost reduct ion the authors show that 1 the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid 2 the winner faces a linear incenti ve contract 3 the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost and 4 the share of cost overruns borne by the winn er decreases with the winner s announced expected cost copyright 1987 by university of chicago press

foundations of dominant strategy mechanisms wilson 1987 criticizes applied game theory s reliance on common knowledge as sumptions in reaction to wilson s critique the recent literature of mechanism design has adopted the goal of finding detail free mechanisms in order to eliminate this re liance in practice this has meant restricting attention to simple mechanisms such as dominant strategy mechanisms however there has been little theoretical foundation for this approach in particular it is not clear the search for an optimal mechanism that does not rely on common knowledge assumption would lead to simpler mechanisms rather than more complicated ones this paper tries to fill the void in the context of an expected revenue maximizing auctioneer we investigate some foundations for using simple dominant strategy auctions

international trade and environmental quality how important are the linkages this paper develops a numerical general equilibrium model of the world economy with local and global environmental externalities the model is then used to investigate the relationship between trade and the environment the authors results suggest that international trade has little impact on environmental quality furthermore the magnitude of the welfare effects of environmental policies is not significantly affected by changes in trade policies at the same time the size and distribution of the gains from trade liberalization appear to be little affected by changes in environmental policies

bundle size pricing as an approximation to mixed bundling multiproduct firms can set separate prices for all possible bundled combinations of its products mixed bundling however this is impractical for firms with more than a few products because the number of prices increases exponentially with the number of products we find that simple pricing strategies are often nearly optimal specifically we show that bundle size pricing setting prices that depend only on the size of bundle purchased tends to be more profitable than offering the individual products priced separately and tends to closely approximate the profits from mixed bundling jel d24 d42 l11 l13 l25

implementation of ururguay round commitments the development challenge at the uruguay round developing countries took on unprecedented obligations not only to reduce trade barriers but to implement significant reforms both of trade procedures e g import licensing procedures customs valuation and of many areas of regulation that establish the basic business environment in the domestic economy e g technical sanitary and phytosanitary standards sps intellectual property law implementing such reforms are investment decisions in that implementation will require purchase of equipment training of people establishment of systems of checks and balances etc this will cost money and the amounts of money involved are substantial based on world bank project experience in the areas covered by the agreements an entire year s development budget is at stake in many of the least developed countries least developed country institutions in these areas are weak and would benefit from strengthening and reform however the authors analysis indicates that the world trade organization wto obligations reflect little awareness of development problems and little appreciation of the capacities of the least developed countries to carry out the functions that sps customs valuation intellectual property etc regulations address the content of these obligations can be characterized as the advanced countries saying to the others do it my way the authors touch at the beginning on another important point because of their limited capacity to participate in the uruguay round negotiations the wto process has generated no sense of ownership of the reforms to which wto membership obligates them from their perspective the implementation exercise has been imposed in an imperial way with little concern for what it will cost how it will be done or if it will support their development efforts this abstract was borrowed from another version of this item

quasi robust multiagent contracts a criticism of mechanism design theory is that the optimal mechanism designed for one environment can produce drastically different actions outcomes and payoffs in a second even slightly different environment in this sense the theoretically optimal mechanisms usually studied are not robust to study robust mechanisms while maintaining an expected utility maximization approach we study a multiagent model in which the mechanism must be designed before the environment is as well understood as is usually assumed the particular model is of an auction setting with binary private values our main result is that if the prior belief about the correlation in the agents values is diffuse enough the optimal bayesian nash auction must also satisfy dominant strategy incentive constraints furthermore when the optimal auction does provide dominant strategy incentives it takes one of two forms i if perfect correlation and negative correlation are excluded as possibilities the auction incorporates all information about the prior belief over the possible correlations and ii if either perfect correlation or negative correlation is a possibility the auction does not incorporate any correlation information and can be described as a modified vickrey auction

revenue maximization with a single sample abstract this paper pursues auctions that are prior independent the goal is to design an auction such that whatever the underlying valuation distribution its expected revenue is almost as large as that of an optimal auction tailored for that distribution we propose the prior independent single sample mechanism which is essentially the vickrey clarke groves vcg mechanism supplemented with reserve prices chosen at random from participants bids we prove that under reasonably general assumptions this mechanism simultaneously approximates all bayesian optimal mechanisms for all valuation distributions conceptually our analysis shows that even a single sample from a distribution some bidder s valuation is sufficient information to obtain near optimal expected revenue

approximation in mechanism design with interdependent values abstract this paper studies the revenue maximization problem in environments wherein buyers have interdependent values and correlated types we show that 1 when the system of feasible sets is a matroid and buyer valuations satisfy a single crossing condition the generalized vickrey clarke groves mechanisms with lazy reserves vcg l are ex post incentive compatible and ex post individually rational 2 if in addition the valuation distribution satisfies a generalized monotone hazard rate condition the vcg l mechanism with conditional monopoly reserves is approximately optimal then we construct an ascending auction that implements the truth telling equilibrium of a vcg l mechanism in ex post equilibrium finally we discuss the connection between the vcg l mechanisms and greedy algorithms studied in lehmann et al 2002 and deferred acceptance auctions studied in milgrom and segal 2014 and the impact of competition by proving a bulow and klemperer 1996 type result

disguised protectionism and linkages to the gatt wto member states of the gatt wto have linked some issue areas outside trade to the institution and did so with varying depths at the same time they have chosen not to link other issue areas what accounts for this variation the author argues that states establish a legalized linkage between the gatt wto and an issue area outside it when they are uncertain about the possibilities of disguised protectionism such uncertainty exists under two conditions when diversity in regulations in an issue area across states generates a large adverse impact on trade negative externalities but that diversity can be justified at the international level for 1 having an independent objective apart from hampering trade and 2 when there are few alternative policies to achieve that objective legitimacy states establish a highly legalized linkage in these situations to reduce the uncertainty and minimize disguised protectionism by contrast when regulatory diversity exhibits low legitimacy states establish only a weakly legalized linkage in the absence of meaningful externalities they do not establish any linkages the author evaluates this argument in two ways he provides an overview of eleven issue areas about which there have been some debates or conflicts about linkages to the gatt wto in addition he carries out in depth case studies of three issue areas labor standards environmental standards and health safety standards the findings of this article contribute to a better understanding of international institutions and cooperation as well as of the evolution of the multilateral trade institution

trade deflection and trade depression this is the first paper to empirically examine whether a country s use of an import restricting trade policy distorts a foreign country s exports to third markets we first develop a theoretical model of worldwide trade in which the imposition of antidumping and safeguard taris or trade remedies by one country causes significant distortions in world trade flows we then empirically test this model by investigating the eect of the united states use of such import restrictions on japanese exports of roughly 4800 products into 37 countries between 1992 and 2001 our estimation yields evidence that us restrictions both deflect and depress japanese export flows to third countries imposition of a us antidumping measure against japan deflects trade as the average antidumping duty on japanese exports leads to a 5 7 increase in japanese exports of the same product to the average third country market the imposition of a us antidumping measure against a third country depresses trade as the average us duty imposed on a third country leads to a 5 19 decrease in japanese exports of that same product to the average third country s market we also document the substantial variation in trade deflection and trade depression across dierent importing countries and exported products

auctions versus posted price selling two popular selling methods posted price selling and auctions are compared here in an independent private values model without auctioning costs auctioning is always optimal when auctioning is costly auctions are still preferable if the marginal revenue curve is sufficiently steep the global steepness of the marginal revenue curve is found to coincide with the dispersion around the mean for a number of standard distributions finally the prices of the monopoly seller and of the social optimum are compared copyright 1993 by american economic association

efficiency of large private value auctions we consider discriminatory and uniform price auctions for multiple identical units of a good players have private values possibly asymmetrically distributed and for multiple units our setting allows for aggregate uncertainty about demand and supply in this setting equlibria generally will be inefficient despite this we show that such auctions become arbitrarily close to efficient if they are large and use this to derive an asymptotic characterization of revenue and bidding behavior

can public private partnerships leverage private investment in agricultural value chains in africa a preliminary review summary public private partnerships ppps may be one way of increasing the level of private sector investment into poorly performing agricultural value chains this paper considers a range of ppp mechanisms that respond to different market failures affecting such chains and draws on principal agent theory to illustrate the challenges it reviews emerging experience with a number of these mechanisms along with experience from other sectors that may shed light on generic problems of implementing ppps in africa while finding some positive impacts on investment it notes that state failures can also undermine ppp effectiveness as the evidence base is still limited it calls on organizations promoting innovative ppps to disclose available information for critical examination

the effectiveness of english auctions abstract we study the performance of the english auction under different assumptions about the seller s degree of bayesian sophistication we define the effectiveness of an auction as the ratio between the expected revenue it generates for the seller and the expected valuation of the object to the bidder with the highest valuation total surplus we identify tight lower bounds on the effectiveness of the english auction for general private values environments and for private values environments where bidders valuations are non negatively correlated for example when the seller faces 12 bidders who the seller believes have non negatively correlated valuations whose expectations are at least as high as 60 of the maximal possible valuation an english auction with no reserve price generates an expected price that is more than 80 of the value of the object to the bidder with the highest valuation

trade policy and environmental regulation in the asia pacific a simulation the asia pacific economic cooperation apec has the potential to become the world s largest free trade area encompassing both developed and developing countries at the same time environmental standards vary substantially in the region a multilateral computable general equilibrium cge model combined with environmental sub models simulates the environmental effects of trade and environmental policy changes the simulations show i even drastic reductions in trade barriers have only a small effect on pollution ii low environmental standards relative to trade partners do not necessarily result in increased pollution when trade is liberalised iii unilaterally raising environmental standards does not crowd out pollution to countries with laxer standards

trade diversion from tomato suspension agreements trade barriers can cause output to be diverted to other countries and into other products we study the effect of a voluntary price restraint vpr on mexican tomatoes entering the united states the diversion caused by the vpr is statistically and economically significant representing over four fifths of the direct effects of the trade barrier when the vpr was binding mexico exported more tomatoes to canada the united states cut back on exports while canada increased their exports to the united states the vpr also diverted fresh tomatoes in mexico into paste production which was then exported to the united states des barrieres commerciales peuvent entrainer la diversion de l output vers d autres pays ou d autres productions on etudie la diversion causee par les accords de restriction volontaire des prix arvp des tomates mexicaines entrant sur le marche americain la diversion causee par les arvp a ete statistiquement et economiquement significative representant plus des quatre cinquiemes des effets directs de la barriere tarifaire quand les arvp ont ete contraignants le mexique a exporte plus de tomates au canada les etats unis ont reduit leurs exportations alors que le canada augmentait ses exportations vers les etats unis les arvp ont aussi entraine une diversion des tomates fraiches au mexique vers la production de puree de tomate un produit qui a alors ete exporte vers les etats unis

correlated information and mechanism design in models of asymmetric information possession of private information leads to rents for the possessors this induces mechanism designers to distort away from efficiency the authors show that this is an artifact of the presumption that information is independently distributed rent extraction in a large class of mechanism design games is analyzed and a necessary and sufficient condition for arbitrarily small rents to private information is provided additionally the two person bargaining game is shown to have an efficient solution under first order stochastic dominance and a hazard rate condition similar conditions allow full rent extraction in milgrom weber auctions

when should sellers use auctions the simultaneous bid auction is a standard method for sellers to solicit offers from buyers a simple alternative is for a seller to ask buyers to make offers sequentially if it is costly for buyers to participate the sequential mechanism will tend to be more efficient than the simultaneous auction because later potential buyers can condition their participation decisions on earlier bids however the sequential mechanism s greater efficiency may not produce higher revenues because while the possibility of deterring later potential entrants can lead early bidders to bid aggressively the fact that later firms might be deterred will tend to reduce revenues the relative revenue performance of the mechanisms will therefore depend on whether the threat of potential future competition which can raise bids in the sequential mechanism is more valuable to the seller than actual competition which will tend to be greater in the simultaneous auction the relative revenue performance of these alternative mechanisms has direct implications for how assets should be sold in the case of how to structure the sale of corporations this question has attracted attention from practitioners and commentators since the delaware supreme court s 1986 revlon decision charged a board overseeing the sale of a company with the duty of getting the best price for the stockholders revlon v mcandrews and forbes holdings 1986 in practice

asymptotic efficiency for discriminatory private value auctions we consider discriminatory auctions for multiple identical units of a good players have private values possibly for multiple units none of the usual assumptions about symmetry of players distributions over values or symmetry of equilibrium play are made because of this equilibria will typically involve inefficient allocations equilibria also become very difficult to solve for using an approach which does not depend on explicit equilibrium calculations we show that such auctions become arbitrarily close to efficient as the number of players and possibly the number of objects grows large and provide a simple characterization of limit equilibria

hidden protectionism evidence from non tariff barriers to trade in the united states abstract can the enforcement of product standards be protectionism in disguise this paper estimates the costs of non compliance with u s product standards using a new database on u s import refusals from 2002 to 2014 we find that import refusals decrease exports to the united states this trade reducing effect is driven by developing countries and by refusals without any product sample analysis in particular during the subprime crisis and its aftermath we also provide evidence that given product standards were enforced more strictly during the crisis while the quality of imported products did not deteriorate these results are consistent with the existence of counter cyclical hidden protectionism due to non tariff barriers to trade in the united states

the relevance of private information in mechanism design abstract recent results in mechanism design show that as long as agents have correlated private information and are sufficiently risk neutral it is possible to design mechanisms that leave agents with arbitrarily small information rents we show that these full rent extraction results hinge on the implicit assumption that the agents beliefs uniquely determine their preferences we present an example of the voluntary provision of a public good in which this assumption is relaxed and consequently even in highly correlated environments if agents beliefs do not uniquely determine their preferences then the extraction of the agents entire information rents is impossible

auctions and bidding a primer maybe the contractor was right to think bid jobs are different but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn t understand the subtleties of competitive bidding the phenomenon experienced by the painting contractor known as the winner s curse is just one of the surprising and puzzling conclusions that have been turned up by modern research into auctions another is the theoretical proposition supported also by some experimental evidence that for example a sealed bid treasury bill auction in which each buyer pays a price equal to the highest rejected bid would yield more revenue to the treasury than the current procedure in which the winning bidder pays the seemingly higher amount equal to his own bid there are also subtle results that demonstrate the equivalence of such apparently different institutions as the standard sealed bid auction in which the auctioneer seller sells the goods to the highest bidder for a price equal to his bid and the dutch auction in which the auctioneer seller begins by asking a high price and gradually lowers the price until

pricing without priors we consider the problem of pricing a single object when the seller has only minimal information about the true valuation of the buyer specifically the seller only knows the support of the possible valuations and has no further distributional information the seller is solving this choice problem under uncertainty by minimizing her regret the pricing policy hedges against uncertainty by randomizing over a range of prices the support of the pricing policy is bounded away from zero buyers with low valuations cannot generate substantial regret and are priced out of the market we generalize the pricing policy without priors to encompass many buyers and many qualities

import restrictions in the presence of a health risk an illustration using fmd we present a simple model linking infection risk from imports to a tariff the risk causes the exporter of the infected product to face a higher tariff than would otherwise be the case a numerical example is developed for u s beef imports from nations with foot and mouth disease fmd the additional tariffs are sensitive to the specification of risk and the expected magnitude of loss due to an fmd outbreak for a low risk of importing fmd the tariffs levied against the exporter of fmd infected beef are not prohibitive but become so as the risk or expected output loss rises

behaviorally optimal auction design examples and observations this paper begins to explore behavioral mechanism design replacing equilibrium by a model based on level k thinking which has strong support in experiments in representative examples we consider optimal sealed bid auctions with two symmetric bidders who have independent private values assuming that the designer knows the distribution of level k bidders we show that in a first price auction level k bidding changes the optimal reserve price and often yields expected revenue that exceeds myerson s 1981 bound and that an exotic auction that exploits bidders non equilibrium beliefs can far exceed the revenue bound we close with some general observations about level k auction design jel c72 c92

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

saving two in a billion quantifying the trade effect of european food safety standards on african exports abstract a growing concern over health risks associated with food products has prompted close examination of sanitary and phytosanitary standards in industrialized countries this paper quantifies the impact of a new harmonized aflatoxin standard set by the eu on food exports from africa we employ a gravity model to estimate the impact of changes in differing levels of protection based on the eu standard in contrast to those suggested by international standards the analysis is based on trade and regulatory survey data for 15 european countries and nine african countries between 1989 and 1998 our results suggest that the implementation of the new aflatoxin standard in the eu will have a negative impact on african exports of cereals dried fruits and nuts to europe the new eu standard which would reduce health risk by approximately 1 4 deaths per billion a year will decrease these african exports by 64 or us 670 million in contrast to regulation set through an international standard

technical regulations and specialization in international trade abstract it is widely acknowledged that while technical regulations can improve welfare and facilitate markets they can also impede trade the trade impeding effects of technical regulations are especially worrisome for developing countries they frequently lack the human and capital resources necessary to satisfy technical measures and thus are more likely to be excluded from markets by technical measures this paper uses highly disaggregated us data on agricultural mining and manufacturing imports to examine the impact of technical regulations on trade patterns using instrumental variables estimation to correct for the potential endogeneity of technical regulations the analysis suggests that technical regulations substantially impinge on poor countries exports their weaker capacities to satisfy technical regulations lead them to specialize away from industries with heavier regulatory burdens

maximal loss from collusion in ipv symmetric auctions abstract we derive a bound on the seller s revenue loss in optimal auctions from unanticipated bidder collusion the relative loss is rather small when there are few bidders it is increasing with the number of bidders but at a slow rate

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

amicable divorce dissolving a partnership with simple mechanisms abstract this paper considers mechanisms for allocating the assets of a dissolving partnership that can be specified without information on the distribution of valuations of the asset or the level of risk aversion of the participants for the case of a single asset and risk averse agents three simple mechanisms are considered these mechanisms can be ranked in terms of ex post efficiency and partially ranked in terms of interim expected utility the efficiency of the alternating selection mechanism is considered for environments when there are many items to be allocated agents are risk neutral and transfers are prohibited conditions are given when a myopic strategy of picking the most preferred abailable item forms an equilibrium and these conditions are satisfied under independence under the further assumption of identical distributions of valuations it is shown that the total expected efficiency loss is at most 1 2 of the maximal value of a single item regardless of how many items are to be allocated

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

calibrated incentive contracts this paper studies a dynamic agency problem which includes limited liability moral hazard and adverse selection the paper develops a robust approach to dynamic contracting based on calibrating the incentive properties of simple benchmark contracts that are attractive but infeasible due to limited liability constraints the resulting dynamic contracts are detail free and satisfy robust performance bounds independently of the underlying process for returns which need not be i i d or even ergodic publication abstract

bargaining versus posted price selling abstract two popular selling methods bargaining and posted price selling are compared here in a dynamic model when bargaining costs no more than posted price selling we find that bargaining is always optimal when bargaining costs more however bargaining is still preferred if and only if the common cost for both selling methods is large enough we also find that an increase in the discount rate or the seller s bargaining power favors bargaining finally we find that if the distribution becomes more dispersed and the increase in a buyer s valuation is sufficiently large bargaining is more likely to be adopted

interest groups trade liberalization and environmental standards in considering a country that imposes a minimum standard on an imported polluting good which generates negative consumption externalities we construct a common agency model in which a domestic environmental group and a foreign industrial lobby can influence the formation of the minimum standard by providing political contributions to the government this paper investigates the effects of trade liberalization on the political equilibrium environmental standard the pattern of trade environmental disutility and social welfare we find that trade liberalization tightens the minimum standard decreases imports of the polluting good and reduces environmental disutilities the importing country s social welfare however does not necessarily increase with trade liberalization the weaker the environmental group s lobbying efficiency or the stronger the foreign firm s lobbying efficiency the more likely it is that trade liberalization will enhance the importing country s welfare

haccp as an international trade standard the widening international use of hazard analysis critical control point haccp approaches by regulators and industry should facilitate trade of food products as countries and companies adopt roughly similar food safety assurance systems first and foremost however adoption of haccp principles is motivated by a desire to improve food safety particularly by the control of food borne pathogens in a manner that passes benefit cost or market tests for regulators trade facilitation is an important but often clearly secondary goal of haccp adoption that it is part of the goal set is due in part to recent trade agreements that seek to limit nontariff barriers to trade arising from food safety sanitary and phytosanitary regulations the pressure to reduce these barriers has led to a focus on haccp adoption as a vehicle for reconciling regulations across countries through various means of regulatory rapprochement this goal hierarchy with improved safety first and trade facilitation second is useful in explaining the likely operation of haccp as an international trade standard in the next decade 2