nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

reserve prices eliminate low revenue equilibria in uniform price auctions abstract uniform price auctions frequently admit equilibria which raise zero seller revenue we show that when demand is sufficiently strong when market supply is more than covered by any bidder s opponents the introduction of a reserve price improves revenue not only by directly increasing the market clearing price but also by eliminating low revenue equilibria in which the market clearing price is almost always equal to the reserve the condition on demand is sharp and when it is not satisfied there exist equilibria in which the market clearing price almost always equals the reserve our results therefore fully characterize the existence of low revenue equilibria in terms of bidder demand at a given reserve price this sharp characterization extends directly to the case of stochastic supply and low revenue equilibria also fail to exist when supply is stochastic and elastic

uniform vs discriminatory auctions with variable supply experimental evidence in the variable supply auction considered here the seller decides how many customers with unit demand to serve after observing their bids bidders are uncertain about the seller s cost we experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting exactly as predicted by theory it turns out that the uniform price auction produces substantially higher bids and consequently yields higher revenues and profits for the seller furthermore again as predicted by theory the uniform price auction yields a higher number of transactions which makes it also the more efficient auction format

competition and cooperation in divisible good auctions an experimental examination an experimental approach is used to examine the performance of three different multiunit auction designs discriminatory uniform price with fixed supply and uniform price with endogenous supply we find the actual strategies to be inconsistent with theoretically identified equilibrium strategies the discriminatory auction is found to be more susceptible to collusion than either uniform price auction and so contrary to theoretical predictions and previous experimental results it generates the lowest average revenue consistent with theoretical predictions the actual bid schedules are more elastic with reducible supply or discriminatory pricing than in the uniform price auction with fixed supply

how do selling mechanisms affect profits surplus capacity and prices with unknown demand i analyze a model in which a seller wishes to sell multiple homogeneous goods to a large group of buyers with unknown demand the seller may either sell objects via a posted price mechanism a discriminatory price auction a uniform price auction their open bid analogs or a revelation mechanism in which the seller first asks all potential buyers to report their valuations and then sets a reserve price i show that the revelation mechanism leads to the greatest profits the auction mechanisms result in identical expected profits and the posted price mechanism results in the smallest profits however the more profitable mechanisms impose stronger informational requirements that may make these mechanisms infeasible in practice and the posted price mechanism also results in the greatest total surplus i also find the seller chooses a lower capacity and reserve price in an auction than in the posted price mechanism

evaluating predictions of change this article applies a technique developed by robert c merton 1981 and roy d henriksson and robert c merton 1981 for evaluating the market timing of financial managers to macroeconomic predictions of change this methodology may be used to determine whether the predictions may be of value to the user as an illustration the methodology is applied to a set of real gross national product forecasts copyright 1990 by the university of chicago

resilience in the dynamics of economy environment systems the ecological concept of resilience has begun to inform analysis of change in economy environment systems the linkages between resilience and the stability of dynamical systems are discussed along with its role in understanding of the evolution of such systems particular linkages discussed include those between resilience biodiversity and the sustainability of alternative states recent developments in modelling the resilience of joint economy environment systems suggest the advantages of analysing change in the system as a markov process the transition probabilities between states offering a natural measure of the resilience of the system in such states it is argued that this emergent property of the collaboration between ecology and economics has far reaching implications for the way we think about model and manage the environmental sustainability of economic development

rationality of inflation output forecasts of mms survey international evidence we analyse the individual rationality of inflation and output forecasts from money market survey mms for a group of g7 countries and eu under asymmetric univariate linlin and linex loss functions we also test for joint rationality of inflation output forecasts using the forecast rationality test under multivariate asymmetric loss functions proposed by ulu 2013 our results indicate that rationality is often rejected under symmetric loss and results improve towards rationality when asymmetric loss functions are assumed the assumption of multivariate asymmetric loss compared to univariate asymmetric loss provides further evidence towards rationality we also analyse directional forecast accuracy of the inflation and output forecasts and find that the inflation output forecasts of mms are valuable when considered both jointly and separately

the treasury s experiment with single price auctions in the mid 1970s winner s or taxpayer s curse this study examines the treasury s experiment with single price bond auctions in the mid 1970s and finds that controlling for factors unrelated to auction technique markups of auction average rates over when issued rates shortly after auctions were a statistically significant seven to eight basis points higher at single price auctions than at discriminating price auctions these results suggest that single price auctions raised treasury borrowing costs by roughly 3 4 percent of the issuing price of auctioned securities copyright 1994 by mit press

do financial indicators have directional predictability for us home sales abstractthis study investigates the directional predictability of financial indicators for home sales across tranquil 1984 2005 and volatile 1972 1983 and 2006 2013 periods we find that the mortgage rate has directional predictability for both existing and newly built home sales for up to 2005 the federal funds rate generally has directional predictability for existing newly built home sales in 1984 2005 1972 1983 the term spread has directional predictability for home sales in 1972 1983 but generally not in the tranquil period of 1984 2005 further unlike mortgage and federal funds rates the term spread has directional predictability for home sales in 2006 2013 and thus can help the fed with useful information assuming that this trend continues

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

auctions with variable supply uniform price versus discriminatory abstract we examine an auction in which the seller determines the supply after observing the bids we compare the uniform price and the discriminatory auction in a setting of supply uncertainty where uncertainty is caused by the interplay of two factors the seller s private information about marginal cost and the seller s incentive to sell the profit maximizing quantity given the received bids in every symmetric mixed strategy equilibrium bidders submit higher bids in the uniform price auction than in the discriminatory auction in the two bidder case this result extends to the set of rationalizable strategies as a consequence we find that the uniform price auction generates a higher expected revenue for the seller and a higher trade volume

market performance and bidders bidding behavior in the new york transmission congestion contract market abstract using publicly available bidder level bids data for transmission congestion contracts tccs and the realized awards of tccs in the nyiso monthly reconfiguration auctions from june 2000 to december 2004 we examine both market performance and bidders bidding behavior in the auctions the data show significant under pricing in the realized awards of tccs theories suggest that under pricing may arise from risk aversion monopsonistic market power or winner s curse our empirical analysis illustrates that all of the three effects play a role in the nyiso tccs market both market performance and bidders bidding strategies can be best explained by the theoretical model with asymmetric information and risk averse bidders

adjustable supply in uniform price auctions non commitment as a strategic tool abstract in some uniform price auctions the auctioneer decides how much to sell after the bidding auctioneer expected profit and social welfare can each be strictly higher in all equilibria given such adjustable supply than in all equilibria given any fixed quantity and reserve price

the impact of auction choice on revenue in treasury bill auctions an empirical evaluation abstract i evaluate whether uniform price or discriminatory auctions are revenue superior for selling treasury bills to this end i apply two structural econometric models hortacsu and mcadams 2010 and fevrier et al 2002 to a dataset on polish zero coupon bonds my secondary aim is to analyze mutual inconsistencies in prediction from these models i find that both agree on the revenue superiority of discriminatory auctions by between 0 01 and 1 5 the models predictions are contradictory in only 7 of auctions the large scale agreement of two vastly different models gives confidence that the conclusions on polish data are robust to varying many of the underlying economic and econometric assumptions and not likely just a modeling artifact

auctions with endogenous quantity this article studies auctions in which several sellers compete for the right to sell to a market characterized by a negatively sloped demand curve in this environment the quantity traded becomes endogenous this effect leads to three results concerning the outcomes of open versus first price sealed bid auctions first an open auction yields a higher expected price than does sealed bidding second and more important the open auction captures less of the potential gains from trade than does the sealed bid auction third for broad classes of demand curves the efficiency gains from switching to sealed bids from an open auction accrue to both sellers and the buyer so that all concerned parties would agree to the change a direct application of the theory is to procurement the heavy use of sealed bidding in procurement is seen as rational in light of these results auction models with endogenous quantity could be an alternative to price setting oligopoly models for the study of price formation in general for the latter impose strong information requirements on agents and yield only equilibrium price vectors not equilibrium processes for determining prices

position auctions with dynamic resizing abstract this paper analyzes mechanisms for selling advertising inventory in a position auction in which displaying less than the maximal number of ads means the ads that are shown can be dynamically resized and displayed more prominently i characterize the optimal mechanism with and without dynamic resizing and illustrate how the optimal reserve prices in a vickrey clarke groves mechanism vary with the amount of dynamic resizing and the number of bidders

erratum to the uniform price auction with endogenous supply abstract this paper shows that low price equilibria in the uniform price auction with endogenous supply do not exist if the seller employs the proportional rationing rule and is consistent when selecting among profit maximizing quantities in a consistent subgame perfect equilibrium the walrasian quantities are traded at the walrasian price

ipos with buy and sell side information production the dark side of open sales the proposed model by incorporating both 1 banker screening of new issues and 2 costly evaluation by investors is the first to admit endogenous double sided information production it demonstrates a nontrivial link between these two sides the banker wishes to structure a sale conducive to investor research because selling to an uninformed pool would result in his own shirking one application of this paradigm indicates that contrary to the findings of most ipo models larger investor pools are not always better this result resolves the participation restriction puzzle of why bankers do not open sales to all bidders even when doing so would maximize competition and reduce underpricing copyright 2005 oxford university press

auctions of divisible goods with endogenous supply abstract uniform price auctions are studied in which the seller may cancel part of the supply after observing the bids this feature eliminates many of the collusive seeming equilibria of the auction in equilibrium the seller always sells the full quantity

divisible good auctions with asymmetric information an experimental examination an experimental approach is used to compare bidding behavior and auction performance in uniform price and discriminatory auctions when there is incomplete information concerning the common value of the auctioned good in a symmetric information environment the different auction formats provide the same average revenue however when information is asymmetric the discriminatory auction results in higher average revenue than the uniform price auction the volatility of revenue is higher in the uniform price auctions in all treatments the results therefore provide support for the use of the discriminatory format subject characteristics and measures of experience in recent auctions are found to be useful in explaining bidding behavior

the uniform price auction with endogenous supply abstract this paper shows that low price equilibria in the uniform price auction with endogenous supply do not exist if the seller employs the proportional rationing rule and is consistent when selecting among profit maximizing quantities in a consistent subgame perfect equilibrium the walrasian quantities are traded at the walrasian price

optimal land conversion and growth with uncertain biodiversity costs abstract the aim of this paper is to characterise the trade offs between economic growth and natural resource conservation by determining the optimal rate of conversion of a natural reserve of land land conversion fuels consumption growth in the private sector while simultaneously giving rise to uncertain environmental consequences accounted for in terms of biodiversity benefits and modelled as non linear stochastic processes random processes governing ecosystem dynamics and adaptation to anthropogenic change are important sources of prevailing ecological uncertainty and contribute to the problem of how to balance economic development against natural resource conservation in a two sector exogenous growth framework we model a stochastic environmental good exhibiting uncertain ecological responses to environmental change and describe the economic and environmental trade offs facing a risk averse social planner allowing for ecological risk tends to slow economic growth if environmental impacts are assumed to increase exponentially as the rate of disturbance increases taken in isolation the effects of ecosystem resilience and ecological uncertainty on the rate of natural resource development are ambiguous and depend on normative parameters such as the social planner s attitude to risk and rate of time preference

depletion of the environmental basis for renewable resources the economics of interdependent renewable and nonrenewable resources abstract this paper synthesizes familiar theories of nonrenewable and renewable resource economics in a two sector partial equilibrium analysis of efficient trade offs between renewable resource production and environmental development the irreversible impacts of coastal zone development provide a motivating example while development proceeds the efficient harvest of renewable resources may exceed the sustainable rate while development may involve several periods of growth and decline once development begins it proceeds without significant interruptions if a profitable renewable sector survives development ceases before exhausting all profitable opportunities interdependent stocks reduce distinctions between resource types because each sector exhibits features of the other

optimal growth with renewable resources and pollution abstract this paper presents three models which combine the optimal dynamics of economic growth renewable resource harvesting and pollution we investigate growth pollution and renewable resources as a three state variable problem the economy has three inputs man made capital renewable resources and emissions endogenous pollution affects both the growth of the renewable resource stock and the social welfare it is shown that the existence of the steady state depends in a complicated manner and in addition to preferences on the production technology growth of the renewable resource and the rate of decay of pollution the sufficient conditions for the existence of a global saddle point are given conditions under which the market solution equals the optimal solution of the social planner and the consequences of a too low externality tax on emissions or on common property resource harvesting are discussed

permit market auctions with allowance reserves this article investigates pollution permit auctions that incorporate allowance reserves in these auctions the sale of a fixed quantity of permits is supplemented by an additional permit reserve this reserve automatically releases permits if a sufficiently high price is triggered the main justifications for implementing an allowance reserve are to reduce price volatility as well as assisting in cost containment we show paradoxically that incorporating an allowance reserve into a permit auction can decrease firms payoffs increase the clearing price and increase compliance costs this has implications for all major cap and trade markets including the us regional greenhouse gas initiative

are government and imf forecasts useful an application of a new market timing test abstract we investigate the directional accuracy of gdp and price forecasts by the japanese government and the imf with a new method developed by pesaran and timmermann pesaran m h timmermann a 2009 testing dependence among serially correlated multi category variables journal of the american statistical association 485 325 337 extending the literature to government forecasts our results illustrate an empirical application of the new test our findings provide positive evidence about the usefulness of imf forecasts whereas they cast doubts about government forecasts

predicting gasoline prices using michigan survey data abstract this study investigates the predictive power of michigan surveys of consumers msc data for gasoline prices specifically we utilize the msc data on both expected inflation and consumer sentiment to construct a vector autoregressive var model for forecasting gasoline prices for 2003 2014 our findings indicate that the var forecasts are superior to the comparable benchmark forecasts obtained from a univariate integrated moving average ma model in terms of both predictive information content and directional accuracy as such we conclude that the msc data on both expected inflation and consumer sentiment have significant predictive information for gasoline prices further inspection reveals that the var forecasts are particularly accurate for the period since 2008 reinforcing the notion that consumers are economically rational

a directional evaluation of corporate executives exchange rate forecasts we investigate the directional accuracy of exchange rate forecasts by corporate executives we find that a forecast with a 1 year horizon is valuable for the profitability and unprofitability predictions of manufacturers although previous studies provide considerable evidence that forecasts with horizons of 1 year and longer are not valuable however a forecast is not valuable in predicting an appreciation or depreciation of the exchange rate our findings suggest that corporate executives are more concerned about and focused on the impact of the exchange rate on their profitability rather than the exchange rate itself

a monte carlo study of the forecasting performance of empirical setar models in this paper we investigate the multi period forecast performance of a number of empirical selfexciting threshold autoregressive setar models that have been proposed in the literature for modelling exchange rates and gnp amongst other variables we take each of the empirical setar models in turn as the dgp to ensure that the non linearity characterises the future and compare the forecast performance of setar and linear autoregressive models on a number of quantitative and qualitative criteria our results indicate that non linear models have an edge in certain states of nature but not in others and that this can be highlighted by evaluating forecasts conditional upon the regime

an optimal ad valorem tax subsidy with an output based refunded emission payment for permits auction in an oligopoly market in this paper we explores a hybrid mechanism of output based refunded emission payment and an ad valorem tax subsidy to remove the distortions emerging in the permit auction market and the product market we find that first best outcomes can be achieved under such a hybrid mechanism a clearing price equal to a pigouvian tax will endogenously result in the permit auction market moreover we extend the analysis to take into consideration the investment in abatement technology

monotone equilibrium in multi unit auctions in two sided multi unit auctions having a variety of payment rules including uniform price and discriminatory auctions a monotone pure strategy equilibrium mpse exists when bidders are risk neutral with independent multi dimensional types and interdependent values in fact all mixed strategy equilibria are ex post allocation and interim expected payment equivalent to mpse thus for standard expected surplus revenue analysis there is no loss restricting attention to monotone strategies