selective entry and auction design abstract this article examines how different auction designs perform when entry is endogenous and selective by which we mean that bidders with higher values are more likely to enter in a model where potential bidders are symmetric we show that three alternative designs can significantly outperform the standard auction with simultaneous and free entry when entry is selective when bidders are asymmetric we show that level of bid preference that maximizes a seller s revenues is significantly affected by the degree of selection we also describe recent empirical and econometric work that shows that the degree of selection can be identified and estimated using standard types of auction data

effective purchasing power in a quantity constrained economy an estimate for the german democratic republic a measure of microeconomic disequilibrium for households facing both budget and quantity constraints is estimated from east german data using a new specification the flexible cobb douglas utility function the parameters of a german direct utility function are estimated from west german family budgets it is estimated that an average east german family in 1977 would have been willing to give up 13 of its total expenditure in order to attain its demands at official prices

investigating bid preferences at low price sealed bid auctions with endogenous participation abstract at procurement auctions with bid preferences qualified firms are treated special a common policy involves scaling the bids of preferred firms by a discount factor for the purposes of evaluation only introducing such an asymmetry has three effects first preferred firms may inflate their bids yet still win the auction second nonpreferred firms may bid more aggressively than in the absence of preferences third the preference policy can affect participation for different cost distributions we solve numerically for the equilibrium bid functions under different discounts and then simulate behaviour our approach allows us to quantify the relative importance of the three effects we find that the participation effect is relatively unimportant and in most cases a positive cost minimizing preference rate exists download download video 34mb video 1

poverty in eastern europe in the years of crisis 1978 to 1987 poland hungary and yugoslavia eastern europe experienced an economic crisis between 1978 and 1987 declining income led to substantial increases in poverty rates in poland and yugoslavia while poverty in hungary remained at about the same level as before the crisis in all three countries urban poverty increased as the economic condition of state sector workers deteriorated to a much greater extent than that of agricultural and mixed households the increased poverty was entirely explained by declining income because the overall income distribution did not change or in some cases improved

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

financial institutions and the financial crisis in east asia abstract this paper investigates institutional reasons for the soft budget constraint problem and how the soft budget constraint problem creates conditions which may result in a financial crisis as a consequence of soft budget constraints bad projects do not stop bad loans accumulate and banks and depositors do not receive bad news on time poorly informed depositors are then likely to herd to overinvest when there is no bankruptcy frenzy and they are likely to herd to panic when bankruptcy occurs crash which may be the result of excessive bad loans that are also a consequence of soft budget constraints in contrast under hard budget constraints information is disclosed quickly regarding liquidation better informed investors are then less likely to herd wrongly

exploring income inequality in rural coastal viet nam income inequality has been rising in parallel with the economic liberalisation process in the former centrally planned economies the opportunities for non agricultural income associated with the market liberalisation process in former centrally planned economies would seem to be important in determining inequality within the rural sector this article reviews the trends in inequality in viet nam examining differential trends and hypothesised causes inequality is important because of its relationship to other factors in the evolution of the agricultural economy such as the incidence of poverty and the sustainability of emerging income sources this article analyses income inequality based on data collected by the author in two districts in coastal northern viet nam the results demonstrate that non agricultural income sources specifically aquaculture and wage and remittance contribute more to present inequality than any other income source simulation shows that the emergence of aquaculture since the l

the returns from schooling in a diversified rural economy controlling for the endogeneity of activity choice and considering both household head and family schooling we findevid ence of high returns from schooling in both crop andnoncrop activities as schooling levels increase the returns from schooling shift away from crop production failure to control for activity selection andfamily schooling is likely to result in biasedestimates of the returns from schooling in individual activities copyright 2000 oxford university press

the influence of central planning on the economic slowdown in the soviet union and eastern europe a comparative production function analysis the estimation of various forms of the production function and because of the use of different data sets predictions of future growth based on these calculations have varied significantly but generally have implied continued decreasing growth of the economy the interpretation is that there are system determined technological constraints in the soviet economy causing the slowdown in growth and that these constraints are identifiable through the parameters of an aggregate production function the finding of diminishing returns to capital is linked to the belief that existing and future deployments of capital cannot be improved and the decreasing rate of factor productivity growth is attributed to microeconomic barriers to the introduction and diffusion of new technology and to expectations about future trends in technical and economic inefficiency the validity of these inferences has not been systematically tested although

when do auctions ensure the welfare maximizing allocation of scarce inputs we determine when an unfettered auction will ensure the welfare maximizing allocation of a scarce input that enhances product quality and may reduce production costs a supplier values the input for this use value and for its foreclosure value because once the input is acquired it is unavailable to rivals an unfettered auction often ensures the welfare maximizing allocation of an input increment however it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage bidder handicapping that ensures auctions generate welfare maximizing input allocations differ from standard handicapping policies

structural adjustment policies and productive efficiency of socialist enterprises abstract the paper uses panel data from a five percent stratified random sample of yugoslav industrial enterprises to test several hypotheses about the determinants of productive efficiency the estimating procedure selects the production function best supported by the data and allows for industry specific production function parameters as well as from firm specific fixed or random effects the instrumental variable estimates suggest that productive efficiency is unaffected by the four structural policy variables whose effect we examine the extent of export orientation joint venture status divisionalization of the firm and the firm s market share

indicative bidding an experimental analysis indicative bidding is a practice commonly used in sales of complex and very expensive assets theoretical analysis shows that efficient entry is not guaranteed under indicative bidding since there is no equilibrium in which more qualified bidders are more likely to be selected for the final sale furthermore there exist alternative bid procedures that in theory at least guarantee 100 efficiency and higher revenue for the seller we employ experiments to compare actual performance between indicative bidding and one of these alternative procedures the data shows that indicative bidding performs as well as the alternative procedure in terms of entry efficiency while having other characteristics that favor it over the alternative procedure our results provide an explanation for the widespread use of indicative bidding despite the potential problem identified in the equilibrium analysis

regulating bidder participation in auctions regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry we show that the relative performance of two such mechanisms a standard first price auction with free entry and an entry rights auction depends nonmonotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism as an empirical application we estimate parameters from first price auctions with free entry for bridge building contracts in oklahoma and texas and predict that an entry rights auction increases efficiency and reduces procurement costs significantly

agricultural income cash crops and inequality in rural pakistan in recent years an increasing amount of attention has focused on the determinants of rural income inequality in the developing world much of this literature has tried to pinpoint the factors that cause some rural individuals and households to receive higher incomes than others two main lines of argumentation can be identified in this literature the first is fairly straightforward namely the argument that unequal land distribution represents a key determinant of rural income inequality in the third world k griffin n quan and others have suggested that since landowning is highly correlated with agricultural income and agricultural income is itself a major component of rural income uneven land distribution is an important factor explaining rural inequality the second line of argumentation is more complicated with authors taking positions on both sides of the issue of whether or not cash crops contribute to rural income inequality 2 on the one hand h bernstein j scott and others maintain that cash crops lead to greater rural inequality because most of the benefits from cash crop production go to the rich 3 however p pinstrup andersen and p hazell and m lipton and r longhurst take an opposite view by arguing that cash crops can and do have a favorable impact on rural income distribution by providing the poor with new employment and income earning opportunities 4 this article seeks to extend the debate concerning the determinants of rural income inequality by making use of a 3 year panel data set from rural pakistan i attempt to make three contributions in this article first i use income decomposition techniques to pinpoint the contribution of different types of income including agricultural income to rural inequality this is useful because few attempts to decompose the sources of rural income inequality have used time series data in ungrouped disaggregated form to analyze the con

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

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

the determinants of nonfarm activities and incomes of rural households in mexico with emphasis on education abstract this paper presents the main results of a study of the effects of education as well as other household assets on the choice of activities and incomes of rural mexican households our study examines the various income sources as well as the education of the household s head and its members implications are drawn for rural education and development policies to promote rural nonfarm incomes and employment

measuring enterprise efficiency in the soviet union a stochastic frontier analysis western economists of diverse persuasions broadly concur that in pursuit of full employment sustained growth and macroecdnomic stability the soviets have built an economic system that imposes sundry constraints on enterprise management and substitutes centralized resource allocation for the automatic market mechanism these expedients to the extent that they have prevented resources from being directed to their best use have imposed efficiency losses on the economy of unknown but perhaps significant dimensions numerous western scholars have inferred from this command economy paradigm as well as from international productivity comparisons that these efficiency losses are large however the proper attribution of these efficiency losses to microlevel sources i e inefficient enterprise operation and to higher level sources i e resource misallocation among enterprises branches etc has been the subject of more speculation than evidence this is because until recently requisite micro level data on enterprise operations were unavailable in a form suitable for empirical analysis of enterprise efficiency this deficiency now has been partially remedied for one sub sector of the soviet economy the cotton refining industry estimates of technical efficiency reported in this study computed using stochastic frontier techniques with a sample of 151 cotton refining enterprises suggest that productive efficiency is high relative to the estimated frontier and exhibits little dispersion this finding in turn suggests that soviet planning administrative procedures and managerial incentive systems may be reasonably effective in controlling overt technical inefficiency by inducing cotton refining enterprises to operate close to the standards established by the most technically efficient enterprises in the industry although these domestic best practice standards may be absolutely high or absolutely low by international standards and may not fully reflect engineering potential our finding of high modal efficiency relative to these standards together with little dispersion does constitute an important piece of evidence bearing on the sources of efficiency loss in the soviet economy this finding suggests that inter enterprise efficiency variation may not be a promising place to look for sources of efficiency loss

bureaucratic tenure and economic performance in centrally planned economies murrell and olson 1991 set forth the hypothesis that in centrally planned economies economic interests over time become fragmented as bureaus become more autonomous and form into narrowly based distributional coalitions as a consequence the national leader s encompassing interest in economic growth becomes compromised and growth begins to slow this paper provides the first direct test of the hypothesis that growing bureaucratic autonomy results in declining economic growth in centrally planned economies

elasticity of substitution technical progress and returns to scale in branches of soviet industry a new ces production function approach this study introduces and tests a new ces production function approach using data from five major branches of the soviet industrial sector the estimated equations obtained suggest that the cobb douglas production function is the appropriate production function for all branches under consideration except food processing

strategic design under uncertain evaluations structural analysis of design build auctions i investigate firms competition over price and product design under uncertain design evaluations in the context of design build db auctions reviewers design evaluations contain uncertainty from a bidder s perspective leading luck to curtail differences in firms chances of winning i model bidders behavior and derive semiparametric identification of the model primitives uncertain evaluations worsen the expected price of design quality and exacerbate an auctioneer s uncertainty in auction outcomes a simple adjustment in the auction mechanism may completely shut down the impact of uncertain evaluations on bidding incentives restoring efficient allocations of projects

the productivity of foreign resource inflow to the soviet economy the recent growth in soviet borrowing from the west resulting in the rise of net soviet debt to 16 billion by 1977 has raised the analytical question of considerable economic and political significance how much are such credits worth to the soviet union several alternative approaches to answering this question are possible broadly speaking they may be grouped into two categories partial equilibrium and general equilibrium in the partial equilibrium analyses we may include i the econometric investigation of whether foreign capital goods have greater productivity in soviet industry and branches than domestic capital goods the relevance of this to the problem at hand being established by the argument that foreign credits may be jointly supplied with the capital goods embodying advanced technology and ii the noneconometric examinations of the role that foreign credits and technology can or do play in specific sectors for example automobiles and oil on the other hand a partial equilibrium approach is not a satisfactory way to approach the question at hand the productivity of foreign credits can be defined meaningfully only in the context of the use of resources generally requiring a general equilibrium approach in turn a general equilibrium approach may be based on the incorporation of foreign credits into one of the large models either of the computable planning type or of the econometric variety as represented by the sovmod exercise of donald green and christopher higgins the productivity of foreign credits being estimated by the required variation in the levels of foreign borrowing therein however these large models tend to be rather cumbersome and the total effects of parametric variations are therefore extremely difficult to disentangle small models by contrast often have the advantage of both elegance and ease of interpretation while not burying the essence of the economic system within a complex structure in this paper i have chosen the small simple decision model approach and elaborated a general equilibrium model of the solow swan variety using a ces production function i have estimated the functional relationships postulated and calculated the productivity of foreign resource inflow of which foreign credits are a component within it in section i the model is set out its structure is justified and the analytical methods to be used to calculate the productivity of foreign resource inflow in it are spelled out in section ii i present the estimates of the model and the productivity of foreign resource inflow that emerges from them section iii offers some concluding observations in light of the estimates

cash crop choice and income dynamics in rural areas evidence for post crisis indonesia in this article we investigate the factors affecting levels and growth of incomes in rural indonesia following the crisis of 1997 1998 in particular we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics framing the article in the context of an optimal labor allocation model relying on unique household panel data from central sulawesi and using advanced panel econometric methods we find that local innovations related to the adoption and intensification of new cash crop varieties more specifically the shift from coffee to cocoa production can explain a substantial part of the observed post crisis developments causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14 higher income levels during the post crisis period compared to the planting of other crops most notably coffee also our results demonstrate the importance of engagement in nonfarm activities for household income growth comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of indonesia

technical change and factor bias in polish industry 1962 1983 this paper provides improved estimates of technological change and the first estimates of factor bias in polish industry the analysis uses newly generated data on western capital the factor assumed responsible for technical change adjusts capital for capacity utilization and tests for more complex specifications of the production function the major findings are 1 the trend in technical change was nonincreasing over the period and technological change was western capital using in only two industries suggesting the government misallocated resources and 2 technical change was nonneutral in six of the eight industries suggesting the existing literature suffers from misspecification copyright 1993 by mit press

auctionin entry into tournaments a research tournament model with heterogeneous contestants is presented for a large class of contests the optimal number of competitors is two this insight makes designing the tournament easier and highlights the importance of selecting highly qualified contestants while customary uniform price and discriminatory price auctions are intuitively appealing mechanisms for solving this adverse selection problem in practice they generally will not be efficient mechanism for selecting contestants instead we propose an alternative auction format that is equally simple to implement and efficiently selects the most qualified contestants to compete regardless of the form of contestant heterogeneity

auctions with selective entry abstract we consider auctions with entry based on a general analytical framework we call the arbitrarily selective as model we characterize symmetric equilibrium in a broad class of standard auctions within this framework in the process extending the classic revenue equivalence results of myerson 1981 riley and samuelson 1981 and levin and smith 1994 to environments with endogenous and arbitrarily selective entry we also explore the relationship between revenue maximization and efficiency showing that a revenue maximizing seller will typically employ both higher than efficient reservation prices and higher than efficient entry fees

bid preference programs and participation in highway procurement auctions we use data from highway procurement auctions subject to california s small business preference program to study the effect of bid preferences on auction outcomes our analysis is based on an estimated model of firms bidding and participation decisions which allows us to evaluate the effects of current and alternative policy designs we show that incorporating participation responses significantly alters the assessment of preferential treatment policies

federalism and the soft budget constraint the government s incentives to bail out inefficient projects are determined by the trade off between political benefits and economic costs the latter depending on the decentralization of government two effects of federalism are derived first fiscal competition among local governments under factor mobility increases the opportunity costs of bailout and thus serves as a commitment device the competition effect second monetary centralization together with fiscal decentralization induces a conflict of interests and thus may harden budget constraints and reduce inflation the checks and balance effect the authors analysis is used to interpret china s recent experience of transition to a market economy copyright 1998 by american economic association

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

costly auction entry royalty payments and the optimality of asymmetric designs abstract we analyze optimal auction mechanisms when bidders base costly entry decisions on their valuations and bidders pay with a fixed royalty rate plus cash with sufficient valuation uncertainty relative to entry costs the optimal mechanism features asymmetry so that bidders enter with strictly positive but different ex ante probabilities when bidders are ex ante identical higher royalty rates which tie payments more closely to bidder valuations increase the optimal degree of asymmetry in auction design further raising revenues when bidders differ ex ante in entry costs the seller favors the low cost entrant whereas when bidders have different valuation distributions the seller favors the weaker bidder if entry costs are low but not if they are high higher royalty rates cause the seller to favor the weaker bidder by less and the strong bidder by more

transition and agricultural labor reforms have strongly affected agricultural employment in transition countries but in remarkably different ways we present a theoretical model and an empirical analysis to explain differences in labor adjustment during transition we show that the differences are due to a combination of variations in initial conditions and differences in reform policies and effects the removal of price distortions and subsidies caused wage and price adjustments during transition and a reduction in labor demand in agriculture surplus labor outflow from agriculture was further stimulated by the privatization of the farm assets as they improve incentives and remove constraints for optimal factor allocation and structural adjustment the shift to individual farms which was especially strong in labor intensive production systems with low labor productivity in agriculture has reduced the outflow of labor from agriculture by improving farm governance and labor efficiency although this effect was mitigated by losses in scale economies due to disruptions and market imperfections in transition in general labor outflow was considerably lower on individual farms than on corporate farms due to a combination of factors related to human capital access to finance and physical capital in the last section of the article we present a general framework for understanding labor adjustments in transition countries specifically we show that there are several patterns of labor transition in one pattern followed by e g the czech republic and hungary there is initially a strong survival of the restructured large scale corporate farms that have laid off many workers in the second phase of transition gradually the importance of individual farms increases in other countries such as romania the opposite has happened in these countries there is an immediate strong shift to individual farms while labor use increases on average in agriculture after this initial phase the shift to individual farms continues albeit more slowly and labor use in agriculture starts to decline finally our analysis shows that in countries such as russia and ukraine much of the surplus labor is still employed by little reformed former collective and state farms major adjustments await more progress in agricultural and general reforms

identification and estimation of auction models with unobserved heterogeneity in many procurement auctions the bidders unobserved costs depend both on a common shock and on idiosyncratic private information assuming a multiplicative structure i derive sufficient conditions under which the model is identified and propose a non parametric estimation procedure that results in uniformly consistent estimators of the cost components distributions the estimation procedure is applied to data from michigan highway procurement auctions private information is estimated to account for 34 of the variation in bidders costs it is shown that accounting for unobserved auction heterogeneity has important implications for the evaluation of the distribution of rents efficiency and optimal auction design

the soviet economic decline soviet growth from 1960 to 1989 was the worst in the world after we control for investment and human capital the relative performance worsens over time there is some evidence that the burden of defense spending modestly contributed to the soviet debacle the declining soviet growth rate from 1950 to 1987 can be accounted for by a declining marginal product of capital with a constant rate of growth of total factor productivity the soviet reliance on extensive growth rising capital to output ratios was no greater than that of market economies such as japan and the republic of korea but a low elasticity of substitution between capital and labor implied especially acute diminishing returns to capital compared with the case in market economies copyright 1995 by oxford university press

increasing competition and the winner s curse evidence from procurement we assess empirically the effects of the winner s curse which in common value auctions counsels more conservative bidding as the number of competitors increases first we construct an econometric model of an auction in which bidders preferences have both common and private value components and propose a new monotone quantile approach which facilitates estimation of this model second we estimate the model using bids from procurement auctions held by the state of new jersey for a large subset of these auctions we find that median procurement costs rise as competition intensifies in this setting then asymmetric information overturns the common economic wisdom that more competition is always desirable

incentives equality and contract renegotiations theory and evidence in the chinese banking industry renegotiation plays an important role in contract theory but the empirical study of renegotiation is almost non existent in the literature using a unique dataset from the chinese banking industry we find that the large majority of managerial incentive contracts are renegotiated after performances are realized we develop a model of contract renegotiation where supervisors and managers sign incentive contracts and then renegotiate them in the unique equilibrium of the model incentive contracts are almost always renegotiated ex post even though renegotiation is fully anticipated incentive contracts affect performance the predictions of the model find strong support from our empirical results

identification of standard auction models this paper presents new identification results for models of first price second price ascending english and descending dutch auctions we consider a general specification of the latent demand and information structure nesting both private values and common values models and allowing correlated types as well as ex ante asymmetry we address identification of a series of nested models and derive testable restrictions enabling discrimination between models on the basis of observed data the simplest model symmetric independent private values is nonparametrically identified even if only the transaction price from each auction is observed for richer models identification and testable restrictions may be obtained when additional information of one or more of the following types is available i the identity of the winning bidder or other bidders ii one or more bids in addition to the transaction price iii exogenous variation in the number of bidders iv bidder specific covariates while many private values pv models are nonparametrically identified and testable with commonly available data identification of common values cv models requires stringent assumptions nonetheless the pv model can be tested against the cv alternative even when neither model is identified

can neoclassical economics underpin the reform of centrally planned economies te here s a curious symmetry between the arguments propounded over the last century in advocacy of socialism and the present popular discussion of the reform of centrally planned economies in those old discussions the vision of socialism was utopian which was contrasted with the dickensian realities of capitalism now the disasters of central planning are contrasted with the benefits flowing from perfectly functioning markets in the conventional wisdom of reform the vision of markets is utopian and that of central planning concentrates on the awful reality what is largely missing in the conventional wisdom is a satisfactory attempt to come to grips with the central question that should be answered in formulating reform plans how does one explain the differences in performance of market capitalist and centrally planned economies of course capitalism has outperformed central planning the developed west is therefore an obvious source of ideas for reforms but the institutions of capitalism come in many varieties and cannot be put in place instantaneously there are many alternative reform paths depending upon the importance attributed to each of these institutions thus there remains the problem of tracing the source of the superiority of capitalist economies to specific characteristics this point was made clear to me on hearing a vietnamese official justify single party rule by noting the economic success of taiwan and singapore reformers need a filter that interprets the experience of capitalist and socialist systems this is exactly where economic theory plays a vital role

institutional reform and labor reallocation during transition theory evidence from polish agriculture abstract reallocation of agricultural labor during transition differs widely between regions and countries our analysis shows that agricultural labor reallocation in poland is determined by a the dramatic adjustment of prices and production costs caused by price liberalization and subsidy cuts b regional differences in farm organization and the impact of institutional reforms on these organizations c structural problems constraining intersectoral mobility the latter limit the benefits from the institutional reforms long term efficiency gains and sustainable rural development are conditional upon reducing such structural constraints and improving the functioning of the labor market

the economic transition of czechoslovakia from plan to market the communist government of czechoslovaki a was ousted in the socalled velvet revolution of november 1989 and the new regime adopted as its goal the transformation of the economy to one based on markets and private property and also one more dynamic and productive than its predecessor this unprecedented transformation poses a variety of intellectual political and economic questions at the same time that the economic system is being transformed the government must also ensure that the hybrid economy that exists during the transition functions sufficiently well to maintain adequate living standards and to sustain political support for the reform process in this paper i examine the economic and intellectual legacies that have shaped the transition process in czechoslovaki a describe the system changes implemented or contemplated for the near future and briefly comment on macroeconomic performance

the impact of public information on bidding in highway procurement auctions a number of papers in the theoretical auction literature show that the release of information regarding the seller s valuation of an item can cause bidders to bid more aggressively this widely accepted result in auction theory remains largely untested in the empirical literature recent theoretical work has also shown that this effect can be more pronounced in auctions with larger common cost uncertainty we examine the impact of a policy change by the oklahoma department of transportation that led to the release of the state s internal estimate of the costs to complete highway construction projects we perform a differences in differences analysis comparing bidding in texas a state that had a uniform policy of revealing the same information all throughout the period of analysis to bidding in oklahoma our results show that in comparison to texas auctions the average bid in oklahoma fell after the change in engineers cost estimate ece policy this decline in bids was even larger for projects where the common uncertainty in costs is greater moreover the within auction standard deviation of bids fell after the change in ece policy with the most significant decline observed again in projects with greater common cost uncertainty

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

technological progress and factor utilization in eastern european economic growth frontier production functions are estimated for the industrial sector of four east european countries czechoslovakia the german democratic republic hungary and poland the estimates reveal that the slowdown in industrial growth in these countries is due to a decline in the efficiency or intensity of factor utilization rather than to declining rates of growth of technological progress in all countries changes in the efficiency of resource utilization are found to be more responsive to changes in macroeconomic policies than to economic reforms finally the amount of labor that could be displaced during cyclical downturns is estimated and found to imply potentially high levels of disguised unemployment copyright 1989 by the london school of economics and political science

the bidder exclusion effect we introduce a new simple to compute test of independence of valuations and the number of bidders for ascending button auctions with symmetric conditionally independent private values the test involves estimating the expected revenue drop from excluding a bidder at random which can be computed as a scaled sample average of a difference of order statistics this object also provides a bound on counterfactual revenue changes from optimal reserve pricing or bidder mergers we illustrate the approach using data from timber auctions where we find some evidence that bidder valuations and the number of participants are not independent