individual behavior and bidding heterogeneity in sealed bid auctions where the number of bidders is unknown i introduction most of the work in sealed bid auction theory and related experimental work has focused on the case in which the number of bidders is known this is of course not always the case in naturally occurring environments for instance construction firms submitting bids in a sealed bid procurement auction may not know exactly how many other firms have completed the costly process of preparing and submitting a bid until bidding has closed there is a body of theory to address environments with an unknown number of bidders mcafee and mcmillan 1987 matthews 1987 harstad kagel and levin 1990 krishna 2002 1 the purpose of this article is to provide theoretical considerations and analysis of a large data set of individual bids from laboratory sealed bid auction markets in which buyers have some information about the number of rivals but not certainty 2 according to the received theory the availability of information about the number of rivals as expected directly affects bidding and therefore seller revenue in first price fp auctions but should not affect bidding in the second price sp auctions although bidding own valuation is optimal in sp auctions regardless of the number of bidders the majority of previous experimental work on auctions with known number of bidders has shown systematic deviation kagel 1995 while a few studies report coincidence with theory see isaac and james 2000b for an extended discussion earlier work on fp auctions with known number of bidders indicated systematic overbidding compared to risk neutral equilibrium risk aversion has been suggested as one of the possible explanations for observed overbidding cox roberson and smith 1982 dyer kagel and levin 1989 is the only previous experimental study looking at individual bidding in auctions where the number of bidders is unknown and their design is different from this study they look at fp auctions with restricted auction size of either six or three participants and ask subjects to submit three bids two bids for contingent bidding procedure and one bid for noncontingent bidding procedure subjects submit all three bids simultaneously and do not know at the time which procedure will be used they find overbidding in this environment compared to risk neutral nash equilibrium although we test for deviation from risk neutral bidding strategy in a more general setting our study also addresses a broader set of questions previous studies of open bid ascending silent auctions suggested that there may have been revenue loss to the sellers by bidders guarding their higher valued items that is remaining physically proximate to the bidding stations isaac and schnier 2005 the possibility that guarding was at the root of the revenue reductions was investigated by isaac and schnier 2006 who replaced the open bid ascending silent auctions with both fp and sp sealed bid auctions which is the environment studied in this article their paper reported on the aggregate revenue effects of the switch to sealed bid auctions but did not look at individual behavior it is clear that such analysis of individual bidding behavior must be informed by theories of bidding with an unknown number of rivals because such is the reality facing bidders in a multiple sealed bid silent auction context in addition data from a noncomputerized experiment closely approximating field auctions allows the analysis of possible behavioral adjustments in the field for example the attempt to guard the item and count the number of bidders such an analysis is presented in this article 3 our analysis of fp auctions contributes to the discussion about the causes of heterogeneous deviation of individual bidding from risk neutral theory cox roberson and smith 1982 and cox smith and walker 1988 reported heterogeneous bidding above risk neutral equilibrium in fp auctions for mechanisms with fixed number of bidders and palfrey and pevnitskaya 2008 for auctions with endogenous entry where the number of bidders was known at the time of submitting a bid

regret and feedback information in first price sealed bid auctions we investigate the effect of regret related feedback information on bidding behavior in sealed bid first price auctions two types of regret are possible in this auction format a winner of the auction may regret paying too much relative to the second highest bid and a loser may regret missing an opportunity to win at a favorable price in theory under very general conditions being sensitive to winning and paying too much should result in lower average bids and being sensitive to missing opportunities to win at a favorable price should result in higher bids for example the u s government s policy of revealing losing bids may cause regret sensitive bidders to anticipate regret and bid conservatively decreasing the government s revenue we test these predictions in the laboratory and find strong support for both

impact of farmer field schools on agricultural productivity and poverty in east africa summary the authors used a longitudinal impact evaluation with quasi experimental methods to provide evidence on economic and production impact of a farmer field school ffs project in east africa ffss were shown to have positive impact on production and income among women low literacy and medium land size farmers participation in ffs increased income by 61 participation in ffs improved agricultural income and crop productivity overall this implies that farmer field schools are a useful approach to increase production and income of small scale farmers in east africa and that the approach can be used to target women and producers with limited literacy

are preferences monotonic testing some predictions of regret theory in this paper the authors demonstrate that the assumption of regret aversion which has been invoked in regret theory to explain several well documented violations of expected utility theory also implies the existence of strict preferences between some stochastically equivalent actions and implies certain systematic violations of monotonicity the authors report an experimental test of these predictions they find that while choices between stochastically equivalent actions are entirely consistent with expected utility theory there is clear evidence of the monotonicity violations predicted by regret theory copyright 1992 by the london school of economics and political science

the economic impact of agricultural extension a review the history of economic development shows that few countries have achieved sustained economic growth without first or simultaneously developing their agricultural sector in most developing countries agriculture is the most important economic activity providing income employment and foreign exchange without an efficient agricultural sector a country is severely constrained in its ability to feed itself or import foreign products for domestic consumption and development rapid technological advances in agriculture have occurred since world war ii these advances have induced great changes in agricultural production and also highlighted the importance of a rapid and efficient transfer of advanced knowledge to the farmer when farmers become aware of the availability of new technology they may have inaccurate perceptions of the related costs and benefits as information availability may be limited as farmers decisions are based on their perceptions their resource allocation and technology choice will deviate from the social optimum if perceptions do not coincide with the correct attributes of the technology both society and the farmers as individuals would gain from improved information and theoretically there should exist a market for information however information on improved agricultural technology is often a public good because the provider of the information cannot exclude other potential users from free access to information provided to one user and the value of the information is not directly affected by the number of users while many instances of market activities in various aspects of agricultural information are observed e g specialized information on pest man

a comparison of buyer determined and price based multiattribute mechanisms reverse auctions are fast becoming the standard for many procurement activities in the past the majority of such auctions have been solely price based but increasingly attributes other than price affect the auction outcome specifically the buyer uses a scoring function to compare bids and the bid with the highest score wins we investigate two mechanisms commonly used for procurement in business to business markets in a setting in which buyers welfare is affected by exogenous nonprice attributes such as the quality service and past relationships under both mechanisms bidders bid based on price but in the buyer determined mechanism the buyer is free to select the bid that maximizes her surplus while in the price based mechanism the buyer commits to awarding the contract to the low price bidder we find both in theory and in the laboratory that the buyer determined mechanism increases the buyer s welfare only as long as enough suppliers compete if the number of suppliers is small and the correlation between cost and quality is low the buyer is better off with the price based mechanism these findings are intended to help procurement managers make better decisions in designing procurement mechanisms for a variety of settings

does feedback really matter in one shot first price auctions does the type of posterior feedback affect how people decide in one shot environments we revisit this question in first price auction markets we consider three feedback types minimal only knowing whether winning or not loser also knowing the winning bid and winner knowing the second highest bid if winning filiz ozbay and ozbay 2007 find that loser as opposed to minimal or winner feedback increases bids we use three novel protocols and additionally replicate theirs using a sample of 624 subjects we find that bidders ex ante knowledge of posterior feedback type has no systematic effect on the average bid value ratios

risk premiums for decision regret some people find decision making under uncertainty difficult because they fear making the wrong decision wrong in the sense that the outcome of their chosen alternative proves to be worse than could have been achieved with another alternative these people may be willing to pay a premium to avoid consequences that produce this decision regret this paper continues an earlier investigation into the normative implications of decision regret and looks at situations where the joint probability distribution of consequences between alternatives is not specified at the time of the decision it includes a discussion of cases where the outcomes produced by alternatives not chosen are never resolved a consequence of this model of preferences for risky situations is that two components of risk aversion may be identified decreasing marginal value and regret aversion

information disclosure in auctions an experiment we report experimental results on the importance of information disclosure policy in first price sealed bid auctions interaction takes place in 10 periods according to a random matching protocol and we control the level of information feedback bidders receive after each period when bidders are informed about the losing bids in previous periods prices are higher than the theoretical prediction however when this information is not revealed the bidding becomes more competitive and the bids come close to the theoretical prediction we suggest that a signaling phenomenon may be important for explaining these results 2002 elsevier science b v all rights reserved

independent private value auctions bidder behaviour in first second and third price auctions with varying numbers of bidders the symmetric equilibrium of third price auctions is characterized it makes a number of contrasting predictions relative to firms and second price auctions bids exceed private values the marginal effects on bids of an increase in private values is greater than one increasing numbers of bidders reduces bids and risk aversion requires bidding below the risk neutral nash equilibrium in the experiment bidders do not always satisfy the point predictions of the theory however the game theoretic models correctly anticipate at least directionally the important effects of the price rule changes copyright 1993 by royal economic society

disappointment in decision making under uncertainty decision analysis requires that two equally desirable consequences should have the same utility and vice versa most analyses of financial decision making presume that two consequences with the same dollar outcome will be equally preferred however winning the top prize of 10 000 in a lottery may leave one much happier than receiving 10 000 as the lowest prize in a lottery this paper explores the implications of disappointment a psychological reaction caused by comparing the actual outcome of a lottery to one s prior expectations for decision making under uncertainty explicit recognition that decision makers may be paying a premium to avoid potential disappointment provides an interpretation for some known behavioral paradoxes and suggests that decision makers may be sensitive to the manner in which a lottery is resolved the concept of disappointment is integrated into utility theory in a prescriptive model

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

risk aversion and overbidding in first price sealed bid auctions new experimental evidence bidding above the risk neutral nash equilibrium in first price sealed bid auctions has traditionally been ascribed to risk aversion later studies however offer other explanations and even argue that risk aversion plays no or a minor role in a novel experimental design we directly test the relationship between risk aversion and overbidding by systematically varying the distribution of risk attitudes in auction markets we find a significant relationship between our measure of risk aversion and overbidding jel d44 c91

pricing substitutable products under consumer regrets abstract since many firms provide consumers with substitutable products which may be launched sequentially over several periods strategic consumers need to make their purchase or wait decisions at the beginning of the first period however they may face second period valuation uncertainty when such decisions are made and decisions made under uncertainty may lead to regrets ex post lots of empirical studies show that consumers anticipate these regrets and take anticipated regrets into consideration this paper studies the impact of valuation uncertainty and consumer anticipated regrets on consumer purchasing behavior firm s prices and pricing strategy we consider a firm selling two substitutable products over two periods one product for one period in a selling season the firm announces all its prices at the beginning of the selling season price commitment or announces each price at the beginning of each period dynamic pricing besides a consumer may experience purchase regret from missing a better choice if she chooses to buy in the first period and otherwise wait regret if she chooses to wait consumers make decisions based on the firm s prices and strategies and the anticipated regrets we find that a firm may need to set a lower price in the first period even when the average valuation in this period is higher second with price commitment the impact of each type of regret on the optimal second period price can be opposite and depends on the value of the uncertainty and regret parameters finally we show that price commitment dominates dynamic pricing and the value of price commitment depends on the uncertainty and anticipated regret

does regret matter in first price auctions overbidding with respect to risk neutral nash predictions in first price auction experiments has been consistently reported in the literature one possible explanation for overbidding is that participants in these experiments may try to avoid regret induced by the knowledge of winning bids in case they do not win these auctions such considerations may drive bidders to bid aggressively in first price auctions we test whether differences in how auction outcomes are revealed produces systematic differences in bidding in our design where individuals bid against pre programmed computers differences in revelation of winning bids does not produce significant treatment differences our results are in contrast to previous experiments which report systematic treatment differences based on whether winning bids are revealed or not

the effect of regret on optimal bidding in auctions while most models of auctions and competitive bidding assume that each bidder s utility for an outcome depends only on his own profit we allow the utility to also depend on any regret that a bidder suffers after the fact and characterize when and how this affects bidding specifically a winner might regret money left on the table in federal offshore oil lease sales while a loser might regret seeing an object sell for less than his own value for it we show that for risk neutral bidders who after the fact know the winner s price for the object a bidder s optimal bidding strategy will not depend on the relative weight given to profit versus regret if both forms of regret weigh equally heavily however if bidders weight money left on the table regret more heavily then the bid taker suffers likewise if losers do not learn the winner s price then the bid taker also suffers thus the existing models exclusion of regret from risk neutral bidders utility functions affects the applicability of the

reconciling conflicting evidence on the performance of propensity score matching methods there is a long standing debate in the literature over whether social programs can be reliably evaluated without a randomized experiment this paper summarizes results from a larger paper smith and todd 2001 that uses experimental data combined with nonexperimental data to evaluate the performance of alternative nonexperimental estimators the impact estimates based on experimental data provide a benchmark against which to judge the performance of nonexperimental estimators our experimental data come from the national supported work nsw demonstration and the nonexperimental data from the current population survey cps and the panel study of income dynamics psid these same data were used in influential papers by robert lalonde 1986 james heckman and joseph hotz 1989 and rajeev dehejia and sadek wahba 1998 1999 we focus on a class of estimators called propensity score matching estimators which were introduced in the statistics literature by paul rosenbaum and donald rubin 1983 traditional propensity score matching methods pair each program participant with a single nonparticipant where pairs are chosen based on the degree of similarity in the estimated probabilities of participating in the program the propensity scores more recently developed nonparametric matching estimators described in heckman et al 1997 1998a b use weighted averages over multiple observations to construct matches we apply both kinds of estimators in this paper heckman et al 1997 1998a b evaluate the performance of matching estimators using experimental data from the u s national job training partnership act jtpa study combined with comparison group samples drawn from three sources they show that data quality is a crucial ingredient to any reliable estimation strategy specifically the estimators they examine are only found to perform well in replicating the results of the experiment when they are applied to comparison group data satisfying the following criteria i the same data sources i e the same surveys or the same type of administrative data or both are used for participants and nonparticipants so that earnings and other characteristics are measured in an analogous way ii participants and nonparticipants reside in the same local labor markets and iii the data contain a rich set of variables relevant to modeling the program participation decision if the comparison group data fails to satisfy these criteria the performance of the estimators diminishes greatly more recently dehejia and wahba 1998 1999 have used the nsw data also used by lalonde to evaluate the performance of propensity score matching methods including pairwise matching and caliper matching they find that these simple matching estimators succeed in closely replicating the experimental nsw results even though the comparison group data do not satisfy any of the criteria found to be important in heckman et al 1997 1998a from this evidence they conclude that matching approaches are generally more reliable than traditional econometric estimators in this paper we reanalyze the nsw data in an attempt to reconcile the conflicting findings smith department of economics university of western ontario social science centre london on n6a 5c2 canada and nber todd department of economics university of pennsylvania 3718 locust walk philadelphia pa 19104 and nber versions of the paper that is the source for this paper have been presented at a 2000 meeting of the institute for research on poverty in madison wisconsin at the western research network on employment and training summer workshop august 2000 at the canadian international labour network meetings september 2000 and at the university of north carolina we thank james heckman for comments on this paper and we thank robert lalonde for comments and for providing us with the data from his 1986 study we thank rajeev dehejia for providing us with information helpful in reconstructing the samples used in the dehejia and wahba 1998 1999 studies jingjing hsee and miana plesca provided excellent research assistance

do auctioneers pick optimal reserve prices we investigate how auctioneers set reserve prices in auctions a well established theoretical result assuming risk neutrality of the seller is that the optimal reserve price should not depend on the number of participating bidders in a set of controlled laboratory experiments we find that seller behavior often deviates from the theoretical benchmarks we extend the existing theory to explore three alternative explanations for our results risk aversion anticipated regret and probability weighting after fitting our data to each of these models through parameter estimation techniques on both an aggregate and individual level we find that all three models are consistent with some of the characteristics of our data but that the regret model provides a slightly more favorable fit overall this paper was accepted by teck hua ho decision analysis

subjective probabilities in games an application to the overbidding puzzle this article illustrates how the joint elicitation of subjective probabilities and preferences may help us understand behavior in games we conduct an experiment to test whether biased probabilistic beliefs may explain overbidding in first price auctions the experimental outcomes indicate that subjects underestimate their probability of winning the auction and indeed overbid when provided with feedback on the precision of their predictions subjects learn to make better predictions and to curb significantly overbidding the structural estimation of different behavioral models suggests that biased probabilistic beliefs are a driving force behind overbidding and that risk aversion plays a lesser role than previously believed

rent seeking with regretful agents theory and experiment abstract we investigate both theoretically and experimentally the role that information disclosure has on behavior in all pay environments in which all agents must exert costly effort but only the winner is rewarded through the lens of all pay auctions we show that bidders who have regret concerns when they lose an auction may alter their bids whether or not information about the winning bid is disclosed all losing bidders regret not bidding 0 however when feedback on the winning bid is provided those bidders who lost at an affordable price may regret not bidding more we show that the former effect causes bidders to lower their bids while the latter effect causes bidders to raise their bids our experimental results indicate overbidding whether or not the winning bid is disclosed to losing bidders however disclosing the winning bid leads to even more aggressive bidding increases revenues decreases the frequency of dropouts and also leads to more efficient allocations thus our results show that information disclosure is a powerful tool that mechanism designers may wish to exploit to extract more rents in all pay environments

information and conspiracy in sealed bid auctions abstract this paper examines the allocative properties of the sealed bid institution when different aspects of the available information to bidders are considered specifically we examine a the effect on price determination in repeated sealed bid auctions of post auction revelation of losing bids and b the effect on price determination when conspiratorial discussions are allowed

auctions with anticipated regret theory and experiment this paper demonstrates theoretically and experimentally that in first price auctions overbidding with respect to the risk neutral nash equilibrium might be driven from anticipated loser regret felt when bidders lose at an affordable price different information structures are created to elicit regret bidders know they will learn the winning bid if they lose loser regret condition or the second highest bid if they win winner regret condition or they will receive no feedback regarding the other bids bidders in loser regret condition anticipated regret and significantly overbid however bidders in the winner regret condition did not anticipate regret jel d44

regret theory a bold alternative to the alternatives in their famous 1982 paper in this journal loomes and sugden introduced regret theory now more than 30 years later the case for the historical importance of this contribution can be made

anticipated regret and product innovation when a firm introduces a product with new features some consumers may find it difficult to assess their valuations for these new attributes their purchase decisions made under such uncertainty may lead to postpurchase regret it has been experimentally shown that consumers may anticipate their potential postpurchase regret and make their current choices to mitigate or minimize it that is a consumer s anticipated regret can significantly impact his purchase decision given the trend that firms in various markets invoke regret to stimulate sales this paper analytically explores whether and how anticipated regret affects competing firms profits and product innovation our analyses reveal that the presence of anticipated regret can increase or decrease firms profits and foster or hinder product innovation depending on whether it makes the consumer segments more or less polarized in other words anticipated regret has a nonmonotonic effect on firms profits and the entrant s optimal quality therefore

revenue equivalence revisited the conventional wisdom in the auction design literature is that first price sealed bid auctions tend to make more money while ascending auctions tend to be more efficient we re examine these issues in an environment in which bidders are allowed to endogenously choose in which auction format to participate our findings are that more bidders choose to enter the ascending auction than the first price sealed bid auction and this extra entry is enough to make up the revenue difference between the formats consequently we find that both formats raise approximately the same amount of revenue they also generate efficiency levels and bidder earnings that are roughly equivalent across mechanisms though the earnings in the ascending might be slightly higher

should sellers prefer auctions a laboratory comparison of auctions and sequential mechanisms when bidders incur a cost to learn their valuations bidder entry can impact auction performance two common selling mechanisms in this environment are an english auction and a sequential bidding process theoretically sellers should prefer the auction because it generates higher expected revenues whereas bidders should prefer the sequential mechanism because it generates higher expected bidder profits we compare the two mechanisms in a controlled laboratory environment varying the entry cost and find that contrary to the theoretical predictions average seller revenues tend to be higher under the sequential mechanism whereas average bidder profits are approximately the same we identify three systematic behavioral deviations from the theoretical model 1 in the auction bidders do not enter 100 of the time 2 in the sequential mechanism bidders do not set preemptive bids according to the predicted threshold strategy and 3 subsequent bidders tend to overenter in response to preemptive bids by first bidders we develop a model of noisy bidder entry costs that is consistent with these behaviors and we show that our model organizes the experimental data well data as supplemental material are available at http dx doi org 10 1287 mnsc 2013 1800

an equilibrium model of the supply chain network under multi attribute behaviors analysis abstract this paper studies a supply chain network scn equilibrium model considering decision makers multi attribute behaviors from the perspective of behavioral finance in this paper an equilibrium model of an uncertain snc is constructed in which retailers choose their decisions according to their risk averse behavior loss averse behavior and regret averse behavior by using different weights to represent retailers attitudes to these three behaviors the retailers multi attribute utility functions are developed the equilibrium conditions of the manufacturers the retailers together with the network are established by the finite dimensional variational inequality formulation three numerical examples are solved in the first numerical example we illustrate the effect of each of these three behaviors on the equilibrium decisions the profits and the utilities of the decision makers in the other two numerical examples we explore the effects of changes in attitudes to these three behaviors on the equilibrium decisions profits and utilities of the decision makers the numerical results show that the equilibrium decisions are affected by each of these three behaviors very much moreover they are sensitive to the changes in attitudes to these behaviors

impulse balance equilibrium and feedback in first price auctions abstract experimental sealed bid first price auctions with private values in which feedback on the losing bids is provided yield lower revenues than auctions where this feedback is not given the concept of weighted impulse balance equilibrium which is based on a principle of ex post rationality and incorporates a concern for social comparison captures the data

an experimental investigation of the seller incentives in the epas emission trading auction the clean air act requires the epa to conduct annual auctions of emission allowances under the discriminative auction rules sellers with the lowest asking prices receive the highest bids this paper studies an inverted version of this auction in which buyers face the same incentives as sellers in the epa auction consistent with theoretical predictions buyers bid above their valuation auction outcomes are inefficient and increasing the number of buyers increases bids buyers facing human opponents compete more aggressively than the risk neutral prediction but bids do not differ systematically from this prediction when buyers face computerized nash robots copyright 1995 by american economic association

when does it pay to delay supplier qualification theory and experiments we study a procurement setting in which the buyer seeks a low price but will not allocate the contract to a supplier who has not passed qualification screening qualification screening is costly for the buyer involving product tests site visits and interviews in addition to a qualified incumbent supplier the buyer has an entrant of unknown qualification the buyer wishes to run a price only open descending reverse auction between the incumbent and the entrant and faces a strategic choice about whether to perform qualification screening on the entrant before or after the auction we analytically study the buyer s optimal strategy accounting for the fact that under postauction qualification the incumbent knows he could lose the auction but still win the contract in our analysis we derive the incumbent s optimal bidding strategy under postauction qualification and find that he follows a threshold structure in which high cost incumbents hold back on bidding or even boycott the auction to preserve their profit margin and only lower cost incumbents bid to win these results are strikingly different from the usual open descending auction analysis where all bidders are fully qualified and bidding to win is always a dominant strategy we test our analytical results in the laboratory with human subjects we find that qualitatively our theoretical predictions hold up quite well although incumbent suppliers bid somewhat more aggressively than the theory predicts making buyers more inclined to use postauction qualification this paper was accepted by martin lariviere operations management

optimal bid disclosure in patent license auctions under alternative modes of competition abstract the literature on patent license auctions in oligopoly assumed that the auctioneer reveals the winning bid and stressed that this gives firms an incentive to bid high in order to signal an aggressive output strategy in a downstream cournot market game and conversely bid low to signal acquiescent pricing in a bertrand market game the present paper examines the information revealed by publishing the winning or the losing or no bid assuming an oligopoly with differentiated goods we rank disclosure rules and find that it is not optimal for the innovator to disclose the winning bid regardless of the mode of competition

advance selling when consumers regret we characterize the effect of anticipated regret on consumer decisions and on firm profits and policies in an advance selling context where buyers have uncertain valuations advance purchases trigger action regret if valuations turn out to be lower than the price paid whereas delaying purchase may cause inaction regret from missing a discount or facing a stockout consumers whom we describe as emotionally rational act strategically in response to the firm s policies and in anticipation of regret in this context regret explains two types of behavioral patterns inertia delayed purchase and frenzies buying early at negative surplus we show how firms should optimally respond to consumer regret and also characterize a normative regret threshold above which they should not advance sell action regret reduces profits as well as the value of advance selling and booking limit policies for price setting firms inaction regret has the opposite effects these effects are diminished by capacity constraints and are reversed for firms facing price pressure in the advance period owing e g to competition or market heterogeneity regret heterogeneity explains premium advance selling for the capacity constrained firm which may benefit from larger shares of regretful buyers finally we show how the negative effects of regret on profits can be mitigated by regret priming marketing campaigns and by offering refunds or options or allowing resales our results highlight the importance of assessing the relative strength of regret within and across market segments and of accounting for these factors in pricing and marketing policies this paper was accepted by christian terwiesch operations management

fertility choice mortality expectations and interdependent preferences an empirical analysis we investigate the empirical relationship between child mortality and fertility across 46 low and middle income countries specifically we model the effect of mortality expectations and interdependent fertility preferences on fertility the direct marginal effect of mortality expectations on fertility is larger than zero but less than unity this implies that a decrease in mortality rates leads to a decrease in children born but to an increase in the number of surviving children and hence the rate of population growth taking into account interdependent fertility preferences whereby an individual s fertility choice affects the fertility decisions of others the marginal effect of mortality expectations on fertility becomes one hence if we allow for both mortality expectations and the amplifying effect of interdependent fertility preferences a decrease in child mortality has no net effect on the rate of population growth

inverse productivity land quality labor markets and measurement error abstract this paper examines the role that land quality and imperfect markets play in generating the inverse productivity relationship in the international crop research institute for the semi arid tropics icrisat data differences in land quality largely explain the inverse productivity ip relationship in the random effects profit regression but not in labor demand regressions controlling for labor and land market failures and differences in soil quality eliminates the ip relationship for male labor but not female labor in the random effects estimates the inverse relationship is much stronger in fixed effects than random effects estimates suggesting that the farm size variable may be subject to measurement error a view supported by the results of instrumental variables estimation