declining values and the afternoon effect evidence from art auctions we study the order of sale in art auctions the final bid relative to the auctioneer s estimated price declines throughout the course of an auction a theoretical model shows that in an auction ordered by declining valuation even in the presence of risk neutral strategic bidders the price received relative to the estimate for later items in an auction should be less than the price relative to the estimate for earlier items furthermore ordering heterogeneous items by value maximizes revenue for the auctioneer

radicalism versus gradualism an analytical survey of the transition strategy debate academic debate on a transition strategy for former socialist economies continues even a quarter century after the collapse of the communism in central and eastern europe and the former soviet union in this paper through an analytical survey of 137 preceding studies we present an overall picture of the debate and examine the relationship between the debate attitudes and the literature attributes in related studies we found that the radicalists maintain a consistent debate attitude from the viewpoints of time speed and policy sequence of economic transition while the debate attitude of the gradualists is more diversified we also found that there is another group of researchers that stays within the framework of the radicalism versus gradualism debate while at the same time keeping at arm s length from both the radicalists and the gradualists in addition our regression estimation of qualitative selection models provides interesting findings on the relationship between the debate attitudes and the literature attributes

bidding behavior at sequential first price auctions with out supply uncertainty a laboratory analysis abstract we report on a series of experiments that test the effects of an uncertain supply on bidding behavior and prices in sequential first price auctions with private independent values and unit demands supply is assumed uncertain when buyers do not know the exact number of units to be sold i e the length of the sequence we observe an important overbidding in all but the last stage of a sequence no matter whether supply is certain and a non monotone behavior when supply is certain yet the data qualitatively support most stage to stage bid predictions and the price trend predictions for risk neutral bidders

absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth abstract this study examines the effects of foreign direct investment fdi and equity foreign portfolio investment efpi on economic growth using data on 80 countries from 1979 through 1998 the results largely suggest that lagged fdi and efpi do not have direct unmitigated positive effects on growth but some data are consistent with the view that the effects of fdi and efpi are contingent on the absorptive capacity of host countries with particular respect to financial or institutional development moreover extreme bound analysis eba of significant results indicates that the estimates are robust compared to other empirical studies on growth

a non expected utility model and its application in practical auctions this article presents a non expected utility decision model which is nonlinear in the winning probabilities the model not only explicitly expresses bidders attitudes to risk but also addresses t

aid and growth what meta analysis reveals abstract recent literature in the meta analysis category where results from a range of studies are brought together throws doubt on the ability of foreign aid to foster economic growth and development this article assesses what meta analysis has to contribute to the literature on the effectiveness of foreign aid in terms of growth impact we re examine key hypotheses and find that the effect of aid on growth is positive and statistically significant this significant effect is genuine and not an artefact of publication selection we also show why our results differ from those published elsewhere

a meta analytic reassessment of the effects of inequality on growth this paper develops a meta analysis of the empirical literature that estimates the effect of inequality on growth it covers studies published in scientific journals during 1994 2014 that examine the impact on growth of inequality in income land and human capital distribution we find traces of publication bias in this literature as authors and journals are more willing to report and publish statistically significant findings and the results tend to follow a predictable time pattern over time according to which negative and positive effects are cyclically reported after correcting for these two forms of publication bias we conclude that the high degree of heterogeneity of the reported effect sizes is explained by study conditions namely the structure of the data the type of countries included in the sample the inclusion of regional dummies the concept of inequality and the definition of income in particular our meta regression analysis suggests that cross section studies systematically report a stronger negative impact than panel data studies the effect of inequality on growth is negative and more pronounced in less developed countries than in rich countries the inclusion of regional dummies in the growth regression of the primary studies considerably weakens such effect expenditure and gross income inequality tend to lead to different estimates of the effect size land and human inequality are more pernicious to subsequent growth than income inequality is we also find that the estimation technique the quality of data on income distribution and the specification of the growth regression do not significantly influence the estimation of the effect sizes these results provide new insights into the nature of the inequality growth relationship and offer important guidelines for policy makers

partnerships and double auctions with interdependent valuations in a symmetric independent private values setting a sealed bid double auction dissolves a partnership efficiently this well known result remains valid in a model with interdependent valuations however if common values components are large agents might prefer not to participate in a double auction therefore a simple extention of the rules of double auctions is suggested that ensures participation even though these modified double auctions are not incentive efficient they still realize gains from trade and can be implemented without knowledge about the specifications of the model

takeover contests toeholds and deterrence we consider a setting in which two potential buyers one with a prior toehold and one without compete in a takeover modeled as an ascending auction with participating costs the toeholder is more aggressive during the takeover process because she is also a seller of her own shares the non toeholder anticipates this extra aggressiveness of the toeholder thus he is deterred from participating unless he has a high valuation for the target company this leads to large inefficiency losses for many configurations expected target returns are first increasing then decreasing in the size of the toehold

auction guarantees for works of art abstract this paper addresses the question of whether auction guarantees change the bidding environment and whether they cause a change in price once the value of an item is taken into account we analyze both the cases of third party guarantees and in house guarantees we use two datasets one of christie s and sotheby s contemporary and impressionist evening sales from january 2010 to february 2012 and another larger dataset consisting of all items auctioned at christie s from 2001 to may 2011 while more expensive items are more likely to have guarantees we find little empirical evidence to suggest an effect on price from the guarantee itself once the value of the item is taken into account

does the sun shine on art prices this paper examines how variation in mood influences subjective risk and hence auction prices for art in london during the period 1990 2007 the private value of an object is closely related to taste and mood which is proxied for by the variation in weather using a unique data set that includes presale estimates for paintings sold through sotheby s and christie s auction houses as well as weather data for london from the british atmospheric data centre we find that the lower part of the price distribution is populated with paintings with a relative high private value whereas in the upper part prices are driven primarily by the common value characteristics our findings have important implications for collectors and investors in the art market

dynamic pricing behavior in perishable goods markets evidence from secondary markets for major league baseball tickets sellers of perishable goods increasingly use dynamic pricing strategies as technology makes it easier to change prices and track inventory this paper tests how accurately theoretical models of dynamic pricing describe sellers behavior in secondary markets for event tickets a classic example of a perishable good it shows that the simplest dynamic pricing models describe very accurately both the pricing problem faced by sellers and how they behave explaining why sellers cut prices dramatically by 40 percent or more as an event approaches the estimates also imply that dynamic pricing is valuable raising the average seller s expected payoff by around 16 percent

international liquidity a welfare analysis the paper addresses the effects of international liquidity conventions on the conduct and success of short run income stabilization two interdependent and noncooperative nations attempt to minimize output variance subject to the international convention that adequate international reserve stocks be maintained we demonstrate that the nash outcome of nations which are bound by international reserve constraints is pareto superior to the nash outcome of unconstrained nations with a formal model we derive the set of pareto optimal liquidity conventions and explore the sensitivity of this set to the macroeconomic structural and stochastic characteristics of the nations and to the stabilization instruments that are employed

a decision support framework for evaluating revenue performance in sequential purchase contexts abstract this paper studies the product ordering problem in sequential purchase contexts where sellers aim to maximize their revenue faced with budget constrained buyers we propose a multi layered decision support framework that combines empirical data with simulation optimization and econometric methods to address this problem our framework allows sellers to i compare revenue performances of limited information sequencing strategies ii quantify benchmark revenue levels that can be achieved via the optimal sequence based on detailed buyer information iii determine the costs of limited information and strategic buyers to the seller and iv identify the moderators of sequencing strategy performance we illustrate our framework through two applications in a business to business used car auction setting contrary to previous studies reporting practitioners tendency to sequence items from the lowest value to the highest our results suggest that the best performing limited information sequencing strategy depends on buyers bidding behavior we also find that the revenue difference between the optimal sequence and a limited information sequencing strategy can be substantial our results show that a significant portion of this revenue difference is associated with the seller s limited information on buyers budgets and product valuations our applications also provide various sensitivity analyses and develop new propositions on the moderators of the relationship between the seller s revenue and sequencing strategies

asymmetric price benefits auctions abstract this paper studies the performance of two auction procedures for allocating the assets of a dissolving partnership when partners valuations for the assets are independent and asymmetrically distributed with one partner reputed to be more interested in the assets to be divided we provide results on existence and uniqueness of the equilibrium induced by these auctions comparative statics are developed especially the differences between relative efficiency and revenue from the two auctions journal of economic literature classification numbers c72 d39 d44 d52 d74 d82

picture this a simple graph that reveals much ado about research funnel graphs provide a simple yet highly effective means to identify key features of an empirical literature this paper illustrates the use of funnel graphs to detect publication selection bias identify the existence of genuine empirical effects and discover potential moderator variables that can help to explain the wide variation routinely found among reported research findings applications include union productivity effects water price elasticities common currency trade effects minimum wage employment effects efficiency wages and the price elasticity of prescription drugs

enterprise reform and corporate governance in russia a quantitative survey the objective of this paper is to verify the range and depth of the study on corporate governance in russia through a comprehensive survey of 202 research works with regard to the internal structure of russian corporations a great deal of research has been conducted in a relatively short time since the collapse of the soviet union by many highly motivated researchers who have provided insightful perspectives these achievements however place too much emphasis on the empirical analysis of the interrelation between ownership structure and corporate restructuring leaving some critical themes open for further discussion as the 21st century begins a well balanced research base should be established in this field in order to identify the reality of russian corporations from a multifaceted perspective

initial shareholdings and overbidding in takeover contests within the context of takeovers this paper shows that in private value auctions the optimal individually rational strategy for a bidder with partial ownership of the item is to overbid i e to bid more than his valuation this strategy however can lead to i an inefficient outcome and ii the winning bidder making a net loss further the overbidding result implies that the presence of a large shareholder increases the bid premium in single bidder takeovers at the expense of reducing the probability of the takeover actually occurring

from theory into practice restructuring and dynamism in transition economies this paper draws on microeconomic industry level and macroeconomic evidence to investigate the mecha nisms of enterprise restructuring in transition economies its outcomes in terms of industry level export perform ance and its interaction with macroeconomic policy and constraints the aim is to throw light on the process by which catch up is taking place in the leading transition economies we begin at the micro level and find that institutional changes have produced improvements in performance more or less in line with theoretical predic tions variation in the extent ofpolicy changes helps to account for cross country differences in restructuring behaviour in the leading transition countries where growth has been under way for a number of years many features of the enterprise sector differentiate it from that of an advanced market economy to measure the extent of catch up associated with the reforms use is made of detailed information about the quality of goods traded on the eu market in the final section the inclusion of macroeconomic constraints allows distinctive transition paths to catching up in the visegrad countries to be identified

beyond publication bias abstract this review considers several meta regression and graphical methods that can differentiate genuine empirical effect from publication bias publication selection exists when editors reviewers or researchers have a preference for statistically significant results because all areas of empirical research are susceptible to publication selection any average or tally of significant insignificant studies is likely to be biased and potentially misleading meta regression analysis can see through the murk of random sampling error and selected misspecification bias to identify the underlying statistical structures that characterize genuine empirical effect meta significance testing and precision effect testing pet are offered as a means to identify empirical effect beyond publication bias and are applied to four areas of empirical economics research minimum wage effects union productivity effects price elasticities and tests of the natural rate hypothesis

international policy coordination in interdependent monetary economies abstract an optimising equilibrium model of two interdependent monetary economies with no other assets except cash perfect foresight flexible exchange rates and imperfect substitution between home and foreign goods is analysed both non cooperative and cooperative market oriented outcomes are time inconsistent since each government has an incentive to renege and levy a surprise inflation tax international policy coordination without pre commitment can be counterproductive even though there are no tax distortions and the provision of public goods is optimal since it exacerbates the credibility problems perceived by the private sectors and therefore leads to a too low level of real money balances and excessive inflation

the paradox of plenty a meta analysis since sachs and warner s seminal article in 1995 numerous studies have addressed the link between natural resources and economic growth although the resource curse effect was commonly accepted at first many articles have challenged its existence and the results found in the literature are ambiguous in this paper we aim to quantitatively review this literature in order to i identify the sources of heterogeneity and ii assess the impact of natural resources on economic growth a meta analysis is performed on 69 empirical studies on the resource curse totaling 1 419 estimates our findings show that i only developing countries suffer from the resource curse although it is soft ii the way natural resources are taken into account is crucial to understand the heterogeneity found in the literature iii the negative impact of the volatility of the terms of trade on growth should be qualified an additional mra performed on indirect effects size also indicate that when institutions are at their best level the resource curse disappears and may be turned into a blessing

macroeconomic impacts of fdi in transition economies a meta analysis summary in this paper we conduct a meta analysis of the literature that empirically examines the impact of foreign direct investment fdi on economic growth in central and eastern europe and the former soviet union we found that existing studies indicate a growth enhancing effect of fdi in the region as a whole the results of our meta regression analysis suggest that the effect size and statistical significance of the reported estimates strongly depend on study conditions we also found that the relevant studies fail to present genuine evidence of a non zero fdi effect more research is necessary to identify the true effect

how auctions work for wine and art interview auctioneers and even to buy a little wine in the meantime i have also had the opportunity with john abowd 1988 to observe and collect data on the auction sale of impressionist and contemporary paintings this paper reports on some of the empirical regularities that i and others have observed in the actual operation of the auction markets for these items in view of the rich and diverse array of theoretical literature on auctions it seems high time economists began to spell out precisely what facts it is meant to explain 2

retailers and consumers in sequential auctions of collectibles we analyse an independent private value model where heterogeneous bidders compete for objects sold in sequential second price auctions in this heterogeneous game bidders may have differently distributed valuations and some have multi unit demand with decreasing marginal values retailers others have a specific single unit demand consumers by examining equilibrium bidding strategies and price sequences we show that the presence of consumers leads to more aggressive bidding from the retailers on average and heterogeneous bidders is a plausible explanation of the price decline effect the study of the expected revenue of the seller confirms the interest of auctioneers in inviting different types of bidders nous analysons un modele a valeurs privees independantes dans lequel des encherisseurs heterogenes sont en concurrence pour des objets vendus lors d encheres sequentielles au second prix dans ce jeu heterogene les encherisseurs tirent leurs evaluations de distributions qui peuvent differer et certains les revendeurs ont des demandes multi unitaires avec des evaluations marginales decroissantes alors que les autres les consommateurs ont une demande individuelle specifique l examen des strategies d equilibre et des sequences de prix montrent que la presence de consommateurs conduit en moyenne a des encheres plus agressives de la part des revendeurs et que la presence d encherisseurs heterogenes constitue une explication plausible a la decroissance des prix l etude de l esperance du revenu du vendeur confirme l interet des commissaires priseurs a inviter differentes categories d acheteurs

sequential auctions of heterogeneous objects abstract we consider sequential second price auctions in which heterogeneous objects are sold to bidders with unit demand and a single dimensional type we show that a symmetric increasing equilibrium exists if objects are ordered in terms of dispersiveness of value distributions equilibrium price declines when objects are equivalent on average and additional conditions hold

catalogue vs order of sale effects in sequential auctions theory and evidence from a rare book sale we examine bidding in a rare book sequential auction that has features of a natural experiment lots were arranged in alphabetical order the reserve set non strategically and half the bids placed by mail in bidders we distinguish between the effects induced by the print order of the catalogue from those by the sequential nature of the sale we document the existence of distinct catalogue effects on prices number of bids and price variability and determine their causes we demonstrate that these catalogue effects also influence floor bidder behaviour we derive a theoretical model that generates key aspects of floor bidder behaviour copyright 2004 royal economic society

impacts of oil price shocks on the united states economy a meta analysis of the oil price elasticity of gdp for net oil importing economies policy makers are interested in estimates of the potential economic impacts of oil price shocks particularly during periods of rapid and large increases that accompany severe supply shocks literature estimates of the economic impacts of oil price shocks summarized by the oil price elasticity of gdp span a very wide range due to both fundamental economic and methodological factors this paper presents a quantitative meta analysis of the oil price elasticity of gdp for net oil importing countries with a focus on the united states us the full range of estimates of the oil price elasticity of gdp for the us in the data is 0 124 to 0 017 accounting for different methodologies data and other factors we employ a meta regression model that controls for key determinant factors to estimate the mean and variance of the gdp elasticity across studies we use a robust estimation technique to deal with heterogeneity of the data and well known econometric issues that confront meta analysis the resulting regression model is used to simulate the oil price elasticity of gdp for the us with a mean of 0 020 and 68 confidence interval of 0 035 to 0 006 four quarters after a shock

endogenous participation in charity auctions abstract data from a recent field experiment suggests that differences in participation rates are responsible for much of the variations in charity auction revenues across formats we provide a theoretical framework for the analysis of this and other related results the model illustrates the limits of previous results that assume full participation and introduces some new considerations to the choice of auction mechanism it also implies however that the data cannot be explained in terms of participation costs alone there must exist mechanism specific obstacles to participation

how not to raise money we show that standard winner pay auctions are inept fund raising mechanisms because of the positive externality bidders forgo if they top another s high bid revenues are suppressed as a result and remain finite even when bidders value a dollar donated the same as a dollar kept this problem does not occur in lotteries and all pay auctions where bidders pay irrespective of whether they win we introduce a general class of all pay auctions rank their revenues and illustrate how they dominate lotteries and winner pay formats the optimal fund raising mechanism is an all pay auction augmented with an entry fee and reserve price

absentee bidders and the declining price anomaly in wine auctions the anomaly is concerned with the observation that in multiple item auctions of identical objects prices tend to decline over time i show that in the case of wine auctions which have been analyzed frequently the anomaly is likely to be caused by the fact that most bids are entered by absentees who use nonoptimal bidding strategies therefore wine auctions can hardly be used to illustrate the standard multiple object auction model

meta regression analysis a quantitative method of literature surveys abstract pedagogically literature reviews are instrumental they summarize the large literature written on a particular topic give coherence to the complex often disparate views expressed about an issue and serve as a springboard for new ideas however literature surveys rarely establish anything approximating unanimous consensus ironically this is just as true for the empirical economic literature to harmonize this dissonance we offer a quantitative methodology for reviewing the empirical economic literature meta regression analysis mra is the regression analysis of regression analyses mra tends to objectify the review process it studies the processes that produce empirical economic results as though they were any other social scientific phenomenon mra provides a framework for replication and offers a sensitivity analysis for model specification in this brief essay we propose a new method of reviewing economic literature mra and discuss its potential

natural resources and economic growth a meta analysis summary an important question in development studies is how natural resources richness affects long term economic growth no consensus answer however has yet emerged with approximately 40 of empirical papers finding a negative effect 40 finding no effect and 20 finding a positive effect does the literature taken together imply the existence of the so called natural resource curse in a quantitative survey of 605 estimates reported in 43 studies we find that overall support for the resource curse hypothesis is weak when potential publication bias and method heterogeneity are taken into account our results also suggest that four aspects of study design are especially effective in explaining the differences in results across studies 1 controlling for institutional quality 2 controlling for the level of investment activity 3 distinguishing between different types of natural resources and 4 differentiating between resource dependence and abundance

government procurement and international trade abstract we model the bidding for a government contract in which there is imperfect competition each bidder is better informed about his own costs than either his rival bidders or the government and the distribution of the domestic firms costs differs from the distribution of foreign firms costs because of comparative advantage effects we find that the government minimizes its expected procurement cost by operating a price preference policy not necessarily purchasing from the lowest bidder

scale economies and the dynamics of recurring auctions we analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects either economies or diseconomies of scale we show that economies of scale give rise to declining expected equilibrium prices whereas the converse is not generally true moreover first and second price auctions are not always revenue equivalent economies of scale make second price auctions more profitable for the seller whereas revenue equivalence may be preserved in the case of diseconomies

monetary policies in interdependent economies with stochastic disturbances a strategic approach western economies have become increasingly interdependent during recent years an important consequence of this is that the effects of macroeconomic policies within these economies have become more closely related a policy implemented in one country will generate effects abroad while the impacts of this policy on the domestic economy are modified by the behaviour and policies of the foreign economies with which it is interacting thus policy making in a multicountry context necessarily involves strategic behaviour analysis of strategic behaviour within the context of international macroeconomic policy began with the pioneering work of hamada 1976 who investigated this question under the assumptions of cournot and stackelberg behaviour his analysis is based on a fixed exchange rate regime and the objective function involves the tradeoff between inflation and the balance of payments more recently canzoneri and gray 1 985 consider alternative strategic monetary policies within the context of two economies subject to a mutual oil disturbance 1 this paper continues the analysis of strategic monetary policy the framework it employs is a two country stochastic macro model in which both economies are subjected to stochastic demand and supply shocks and expectations are rational 2 the policy makers in the two countries seek to optimise their respective objective functions which are taken to be functions of unanticipated movements in output and in the consumer price index the model begins by determining the usual cournot and stackelberg equilibria for this model however these represent just two possible equilibria and a number of alternatives are also considered in particular in the derivation of the cournot equilibrium each agent takes the behaviour of his opponent as given and therefore assumes that his rival does not react to his actions on the other hand each agent is shown to respond in accordance with a reaction function so that ex post the assumption of no response is incorrect by contrast we also consider a consistent conjectural variations equilibrium ccv in which each policy maker in determining his own actions correctly conjectures the response of his opponent the requirement of con

a meta analysis of the indirect impact of foreign direct investment in old and new eu member states understanding productivity spillovers in this paper we summarise combine and explain recent findings from firm level empirical literature focusing on the indirect impact of foreign direct investment fdi on economic performance measured as productivity in the enlarged europe we have reviewed 52 quantitative studies released between 2000 and 2015 and codified 1 133 estimates we run a regression of regressions which measures the strength of the fdi productivity relationship taking advantage of large number of high quality studies on fdi and its role in explaining the growth in firms productivity in europe we adopt recent meta regression analysis methods funnel asymmetry and precision estimate tests and precision effect estimate with standard errors to explain the heterogeneous impact of fdi this paper assesses the country specific impact of fdi on firms performance after taking publication selection bias econometric modelling and the individual studies characteristics fully into account our results show that on average fdi has a positive indirect impact on productivity the impact is especially significant in selected european countries and we interpret this as a sign of better absorptive capacities in those countries

secret reserve prices in a bidding model with a re sale option this paper presents an auction model in which the seller may choose not to sell in spite of receiving a bid above the announced reserve price such behavior is seen frequently in auctions yet would be suboptimal within most existing models here the seller uses resale to signal information about the object s value that could not be easily communicated via a reserve price announcement the model predicts that bids for reauctioned objects increase relative to initial bids and that on average prices of both reauctioned items and those sold at initial auction rise as delay in reauctioning increases copyright 1997 by american economic association

auctions and the price of art the value of most important works of art is established by public auction either directly by an actual sale or indirectly by reference to other sales how the auction system works is thus a critical determinant of how the public s preferences are translated into the evaluation of artistic work the auction system is central in the determination of the incentives for artistic work and the efficiency of the auction system is a key determinant of the cost of creating and distributing works of art this paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system actually works what it indicates about price formation and how well it performs we begin our discussion in section 2 with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics the first topic concerns how auction prices can be used to determine and compare overall price movements within the art market and other markets and the second topic concerns how the auction mechanism influences prices we

are art auction estimates biased this article considers whether presale auction estimates are unbiased predictors of price when no sales are considered utilizing a newly constructed sample of over 500 works by eight early twentieth century american artists unbiased presale auction estimates in predicting price while expected are generally not supported in previous work but these studies excepting one do not include no sales in the calculations in order to study the question we employ a standard approach that uses an inverse mills ratio arising from a sample selection probit to correct for selection bias we find that controlling for selection bias presale auction estimates appear to be biased downward and we offer possible reasons for this result

auctions with price proportional benefits to bidders after some auctions including amish estate sales and buyer rings knockout auctions each bidder receives a share of the revenue generated by the auction we show that in the symmetric case equilibrium bids in both first price sealed bid auctions and oral auctions increase as each bidder s share increases in the case of independent signals oral auctions result in higher expected equilibrium prices than do first price sealed bid auctions journal of economic literature classification number d44

vested interest and biased price estimates evidence from an auction market this study employs a new data set from art auctions to examine the relationship between auctioneer presale price estimates and the long term performance of artworks we find that the price estimates for expensive paintings have a consistent upward bias over a long period of 30 years high estimates at the time of purchase are associated with adverse subsequent abnormal returns moreover the estimation error for individual paintings tends to persist over time these results are consistent with the view that auction house price estimates are affected by agency problems and that

private information and altruism in bidding roscas this article studies how altruism improves allocations in a private information environment where strategic behaviour reduces economic welfare a theoretical analysis establishes that in an environment characterised by uncertainty and private information outcomes of auctions in rotating savings and credit associations roscas are more efficient when bidders preferences are altruistic rather than selfish a semi parametric structural estimation technique for rosca auctions is presented a parametric structural estimation identifies interactions between group characteristics and bidder altruism it is found that effective leadership and intra group diversity are associated with a greater extent of bidder altruism and thus more efficient intra rosca allocations

on the strategic choice between capital and labor mobility abstract this paper analyzes the strategies of two governments when choosing between capital and labor mobility for each type of factor mobility the nash equilibria under both income taxes and quotas on factor flows are derived from each country s point of view an income tax dominates a quota the paper also shows that in a strategic environment ramaswami s result that a country prefers the restricted inflow of a scarce factor to the restricted outflow of an abundant factor continues to hold for some initial factor endowments but the opposite result may obtain for other factor endowments

learning to bid in sequential dutch auctions abstract we propose an agent based computational model to investigate sequential dutch auctions with particular emphasis on markets for perishable goods and we take as an example wholesale fish markets buyers in these markets sell the fish they purchase on a retail market the paper provides an original model of boundedly rational behavior for wholesale buyers behavior incorporating learning to improve profits conjectures as to the bids that will be made and fictitious learning we analyze the dynamics of the aggregate price under different market conditions in order to explain the emergence of market price patterns such as the well known declining price paradox and the empirically observed fact that the very last transactions in the day may be at a higher price the proposed behavioral model provides alternative explanations for market price dynamics to those which depend on standard hypotheses such as diminishing marginal profits furthermore agents learn the option value of having the possibility of bidding in later rounds when confronted with random buyers such as occasional participants or new entrants they learn to bid in the optimal way without being conscious of the strategies of the other buyers when faced with other buyers who are also learning their behavior still displays some of the characteristics learned in the simpler case even though the problem is not analytically tractable

guarantees in auctions the auction house as negotiator and managerial decision maker the multimillion dollar price guarantees that an auction house can offer for paintings have already had a large impact on auction house profits and place new demands on the auctioneer s decision making and negotiating skills yet auctioneers have not been studied as independent entities and decision makers to create a price guarantee the auction house and the seller must negotiate both the guarantee amount and the extra commission the seller pays if the auction price exceeds the guarantee we present a normative model of negotiations and find the frontier of guarantee and commission that is the nash bargaining solution we also determine the optimal reserve that the auctioneer should place on guaranteed property we find that guarantees decrease the auction house s expected revenue compared to a conventional auction but do allow it to attract business which might otherwise be lost guarantees benefit sellers increasing the expected value and lowering the variance of their auction revenue the auctioneer s optimal strategy depends not only on the distribution of the artwork s auction price but also the price it will bring if it fails to sell at auction in the latter case the auction house must pay the seller the guarantee and then sell the artwork which it now owns in a private secondary market where buyers regard the property as damaged goods and lower their offers although all points on the frontier produce equal expected revenue several frequently used decision making rules suggest that both parties may prefer a guarantee arrangement where the seller pays no additional commission and the guarantee has the lowest value on the frontier

anchoring effects evidence from art auctions in order to separate anchoring where an irrelevant message has an effect on the outcome from rational learning where past prices are not irrelevant because they may be used to estimate unobservable quality we use the following strategy we first develop a hedonic prediction of price for both the current sale e g the 2006 sale and the previous sale these hedonic predic tions are based on observable characteristics of each painting and an index of overall prices we then regress actual sale price on our hedonic prediction on the difference between the actual price in the previous sale and our hedonic prediction this expression tests for anchoring and on the difference between the actual price in the previous sale and our hedonic prediction of price in the previous sale this expression controls for unobservable characteristics the test for anchor ing is the extent to which the actual price in the previous sale affects the current sale price we can identify anchoring from other effects because the demand for art which is captured by the average overall price index changes over time whereas the unobservable component of qual ity is assumed to remain constant between auctions this allows us to control for unobserved quality characteristics as long as something drastic has not happened between sales such as a painting has been deemed a fake which is a very rare occurrence the assumption of constant quality is a realistic one

bidding in private value auctions with uncertain values abstract auctions are often used to sell idiosyncratic goods difficult for potential bidders to value ex ante laboratory auctions with uncertainty over final values in this experiment resulted in 18 and 27 of bids above the expected value of the item in private value first price and english auctions respectively risk seeking preferences as measured on an individual decision task cannot explain overbidding and the first price auction results suggest that risk aversion may not be a good explanation for bidding behavior observed with certain values several candidate explanations fail to explain overbidding rather it appears to stem from some bidders who are prone to overbidding relative to first price auctions the size and frequency of overbids are significantly larger in english auctions while more english auctions are won by overbidders differences between the formats appear to be driven by the dynamic nature of english auctions which is consistent with popular notions of auction fever

optimal auctions with asymmetric financial externalities abstract this paper studies optimal auction design with asymmetric linear financial externalities among bidders when the matrix that relates bidders payoffs to their payments is nonsingular the payment related component in the design objective must equal a unique linear combination of its counterparts in bidder s payoffs if all multipliers of the linear combination are nonnegative a modified myerson procedure is discovered for deriving the optimal design if any multiplier is negative an arbitrarily high value can be achieved for design objective by setting proper fixed transfers to bidders when the matrix is singular the unbounded optimum result typically prevails we applied our method to auctions with cross shareholdings and charity auctions for revenue maximizing and efficient designs

remittances and economic growth a meta analysis abstract expatriate workers remittances represent an important source of financing for low and middle income countries no consensus however has yet emerged regarding the effect of remittances on economic growth in a quantitative survey of 538 estimates reported in 95 studies we find that approximately 40 of the studies report a positive effect 40 report no effect and 20 report a negative effect our results indicate publication bias in favor of positive effects correcting for the bias using recently developed techniques we find that the mean effect of remittances on growth is still positive but economically small nevertheless our results uncover noticeable regional differences remittances are growth enhancing in asia but not in africa studies that do not control for alternative sources of external finance such as foreign aid and foreign direct investment mismeasure the effect of remittances finally time series studies and studies ignoring endogeneity issues report systematically larger effects of remittances on growth

how much do distortions affect growth abstract this paper presents a simple endogenous growth model with two types of capital which can display sizeable long run growth effects of distortionary policies the model applies to many different types of distortions of relative prices common in developing countries such as differential taxes and tariffs black market exchange rates and price controls the model shows that a subsidy to one type of capital financed by a tax on another capital good lowers growth a measure of the variance of relative prices of investment goods across sectors has a negative and statistically significant effect on growth

silent auctions in the field and in the laboratory we analyze data from hundreds of auctions from three field silent auction sessions we focus on the descriptive statistics and on a parametric model of jump bidding we then report data from six laboratory sessions of silent auctions as a controlled environment this allows us to evaluate the auctions in ways not available within the field the laboratory experiments capture essential features of the field sessions and thus comprise a credible laboratory testbed for further examination of institutional perturbations in the silent auction jel d44 h41

bidding behavior and experience in internet auctions abstract we study the role of experience in internet art auctions by analyzing repeated bidding by the same bidder in a unique longitudinal field dataset our results show that experience significantly lowers the level of bids suggesting that bidders change their bidding behavior throughout time participating in more than ten auctions brings down average bids by up to 26 we further test several possible explanations for the observed learning behavior and show that the change in bidding strategy is a result of a change in within auction behavior that is generated with experience our results are robust to concerns of endogenous participation as well as bidder fixed effects

bilateral investment treaties and fdi does the sector matter summary developing and transition countries have increasingly engaged in the signing of bilateral investment treaties bits in order to attract fdi based on the widely shared view that fdi can contribute significantly to economic development and poverty reduction however the degree to which foreign investments can be expected to generate employment offer access to international technology and know how and ultimately create growth varies considerably depending on the type of investment it is therefore important to determine what type of fdi is attracted by bits by providing a legal commitment to the fair and equitable treatment of foreign investors bits aim to decrease investment risk and to attract foreign investors we argue that bits can be expected to be most effective in those sectors of the economy with a larger risk of expropriation i e sectors characterized by large sunk costs relatively low levels of firm specific know how and in sectors that are politically sensitive to foreign ownership this paper represents the first attempt to empirically study the heterogeneous effect that bits may have across different sectors of investments we analyze investments made in 13 countries in the former soviet union and central and eastern europe disaggregated over seven sectors we indeed find the effect of bits to differ considerably across sectors of investment using capital intensity as a proxy we confirm that fdi in those sectors with higher sunk costs responds more strongly to the signing of bits given the considerable differences in the development impact that can be expected from fdi in different sectors it remains to be shown whether bits are an effective tool to attract those types of investments that are most beneficial for the development of the host economy

ordering revenue and anchoring in art auctions we estimate the effect of ordering by value on revenues in sequential art auctions held by sotheby s and christie s we exploit a pre determined rotation of which of these two houses holds their auction first during auction week in new york city when the house that goes first has relatively expensive paintings compared to the other house we find that the sale premium for the week is around 21 higher relative to the mean sale premium and the fraction of paintings sold during the week is around 11 higher we provide evidence that this is due to an anchoring effect

charitable motives and bidding in charity auctions research on bidding in auctions has generally relied on the assumption of self interested bidders this work relaxes that assumption in the context of charity auctions because understanding charitable motives has important implications for auction design and charities fundraising strategies this study investigates bidders specific types of charitable motives and the strength of these motives we carry out three controlled field experiments consisting of real life auctions conducted on a local internet auction site we use a novel design in which we simultaneously run charity and noncharity auctions for identical products and vary the percentage donated to charity results show that auctions with proceeds donated to charity lead to significantly higher selling prices a result due to a higher bidding by bidders with charitable motives rather than to increased bidder entry we also find that increased prices only occur when the charitable donation is a percentage of the auction revenue and that a fixed charitable donation associated with each auction has no effect on prices furthermore we find that prices are increasing in the percentage donated to charity we find considerable support for a model of voluntary shill like bidding where charitable bidders try to increase proceeds in charity auctions we also find that auctions with 25 of revenue donated to charity had higher net revenue than noncharity auctions hence companies may be able to use charity auctions as part of a corporate social responsibility strategy and at the same time increase profitability even though they donate part of the proceeds to charity

the impact of reserve prices on the perceived bias of expert appraisals of fine art we examine whether the expert appraisals provided to bidders before major art auctions are unbiased indicators of market value despite a strong grounding in theory this aspect of optimal auction design has been frequently challenged in previous empirical research particularly in the market for fine art we adopt a valuation benchmark that incorporates sellers reservation prices as well as high bids and recognize latent censoring due to works that fail to make reserve although the auction houses never divulge sellers reserve prices which are therefore unobservable we exploit the fact that they can be observed indirectly via their impact on buy in rates using the set of french impressionist paintings brought to auction from 1985 to 2001 we estimate the distribution of seller reserve prices establish their link to a proper valuation benchmark and isolate the selection bias due to bought in works on the perceived market value of fine art works brought to auction after controlling for the impact of reservation prices and considering all works brought to auction and therefore all works appraised we find no evidence of bias in the experts pre sale estimates

how not to run auctions the european 3g telecom auctions abstract there were enormous differences in the revenues from the european third generation 3g or umts mobile phone license auctions from 20 euros per capita in switzerland to 650 euros per capita in the uk though the values of the licenses sold were similar poor auction designs in some countries facilitated collusion between firms and failed to attract entrants the sequencing of the auctions was also crucial we discuss the auctions in the uk netherlands germany italy austria switzerland belgium greece and denmark

rotating savings and credit associations when participants are risk averse we model rotating savings and credit associations roscas among risk averse participants who experience privately observed income shocks a random rosca is not advantageous whereas a bidding rosca is if temporal risk aversion is less pronounced than static risk aversion the payoff scheme of a bidding rosca facilitates risk sharing in the presence of information asymmetries the risk sharing performance of a simple arrangement where a group of homogenous individuals runs several bidding roscas simultaneously is as good as that of a linear risk sharing contract and is more enforceable because it carries a fixed rather than a variable contribution

national sovereignty and international monetary order abstract the choice of exchange rate regime is examined in a three country model in which the regime chosen by one country affects other countries opportunities it is shown that the interaction of different countries choices of exchange rate regime may be characterized by either strategic complementarity or strategic substitution as a result if each country pursues its national interest independently either nonexistence or nonuniqueness of equilibrium among different countries regime choices is possible the model therefore provides an alternative rationale for international policy coordination

the welfare case for the european monetary system abstract this paper argues that the european monetary system can be interpreted as a cooperative game yielding benefits to its members a simple model is set up in which it is shown that the ems solution is superior to nash if the menber countries differ this superiority to nash may require an occasional realignment it will also then require that there be no sterilization of foreign exchange interventions since otherwise the system would collpase the ems is interpreted in this paper as an arrangement manner and not o bretton woods type of arrangement when there is a leader follower relationship inside

charity auctions with multiple goods bidding behavior and revenue abstract in a charity auction with multiple goods we show that the highest losing bid uniform price auction revenue dominates its lowest winning bid counterpart only in the highest losing bid uniform price auction is bidding independent of the number of goods and players and revenue increasing in the number of goods

the determinants of foreign direct investment in transition economies a meta analysis in this paper we conduct a meta analysis of studies that empirically examine the relationship between economic transformation and foreign direct investment fdi performance in central and eastern europe and the former soviet union over the past quarter century more specifically we synthesise the empirical evidence reported in previous studies that deal with the determinants of fdi in transition economies focusing on the impacts of transition factors we also perform meta regression analysis to specify determinant factors of the heterogeneity among the relevant studies and the presence of publication selection bias we find that the existing literature reports a statistically significant non zero effect as a whole and a genuine effect is confirmed for some fdi determinants beyond the publication selection bias

the declining price anomaly in dutch dutch rose auctions in symmetric independent private value auctions of a single object with risk neutral bidders the english second price auction has strategic simplicity it is optimal for bidders to reveal their valuation of the object and make bids accordingly in that case the auction is won by the person with the highest valuation who pays a price equal to the second highest valuation in a dutch first price auction this simplicity vanishes here winning bidders have to pay their bid to make a profit they shade their bids and bid below their valuation of the object somewhat loosely one may state that an english auction is truth revealing whereas a dutch auction requires strategic behavior the simple structure of the one unit english auction vanishes if two identical objects are auctioned sequentially now in the first round it is optimal for bidders to shade their bids to account for the option value of participating in the subsequent second round robert j weber 1983 bidders with a higher valuation also have a higher option value therefore they shade their bids in the first round by a greater amount than do bidders with a lower valuation as the auction proceeds the number of bidders decreases over the sequence of auctions the number of objects decreases as well the first fact has a negative effect on the competition for an object and the second has a positive effect both effects cancel out and prices follow a martingale as a result all gains to waiting are arbitraged away and the expected prices in both rounds are the same the latter result also holds for sequential auctions of more than two objects and does not depend on whether the auction is english or dutch this neat theoretical result is not supported by empirical research which usually finds price declines orley ashenfelter 1989 found a mild price decrease in sequential auctions of identical units of wine mcafee and daniel vincent 1993 also present empirical evidence on sequential wine auctions they found that on average the second unit of wine was sold at a price 1 4 percent lower than the price of the first unit victor ginsburgh 1998 uses data from wine auctions in which the auctioneer acted as an agent for bidders who were not present at the auction he found price declines but apparently the absent bidders entered bids that did not fit with the theory empirical studies by ashenfelter and david genesove 1992 see also jean jacques laffont 1997 and alan beggs and kathryn graddy 1997 concern heterogeneous objects they also detected price declines because of the contradiction between theory and empirical studies the declining price phenomenon is regarded to be an anomaly

collusive practices in repeated english auctions experimental evidence on bidding rings the repeated meeting of buyers at english auctions where multiple units are sold is a common occurrence the art auctions at sotheby s christie s and other prestigious auction houses are attended by a regular group of institutional buyers more mundanely the same taxicab buyers meet at vehicle auctions for used police cars jon p nelson 1995 commission order buyers attend the same livestock and agricultural commodity auctions these buyers may be agents for multiple meat processors u s department of agriculture grain inspection packers and stockyards administration 2001 the 1946 american tobacco antitrust case american tobacco co et al v united states 328 u s 781 1946 is a well known account of how buyers of tobacco operated to hold down the price of auctioned leaf tobacco at various sites buyers for the big three cigarette manufacturers had developed facilitating practices that helped them purchase raw tobacco at relatively low prices these buyers voluntarily restricted themselves to attend the same auctions buyers were aware of the amount of leaf and the tobacco grades available at auction sites they had instructions from the cigarette makers on the highest bid prices they could pay and communication among these buyers seemed evident from a coordinated practice of buying low grade tobacco that was not used by the makers in the sale of livestock cattle producers have claimed that packer buyers act to hold down cattle prices at the auction site there are a few large processors who give their agents buy orders these orders along with further communication between the processor and agent instruct the agent on the number of cattle to purchase during a given week and provide a schedule of prices they can pay for varying types of cattle some agents represent more than one processor or packer and therefore have multiple buy orders agents repeatedly meet each other at regional cattle auctions they may not be the only buyers but they are the largest purchasers of slaughter cattle brought to market and at most auction sites have substantial monopsony power this paper documents the impacts of several practices that may facilitate low sale prices when multiple units are sold at repeated english auctions laboratory english auction markets are created the number of symmetric buyers attending the auction is either six or two with total demand in these two environments held constant the six buyer market is intended to represent a relatively competitive environment while auctions with two buyers represent rivalry with substantial monopsony power held by each agent we use these two market environments to study how selected treatments or facilitating influences affect the behavior of buying agents the six buyer market generally is viewed as a control for comparison to the dominant twobuyer environment but very collusive behavior may be observed in the six buyer auctions depending upon market practices phillips department of economics and finance university of wyoming p o box 3985 laramie wy 82071 e mail owenphil uwyo edu menkhaus department of agricultural and applied economics university of wyoming p o box 3354 laramie wy 82071 e mail menkhaus uwyo edu coatney u s department of agriculture grain inspection packers and stockyards administration competition branch aurora co 80011 e mail kalyn t coatney usda gov this work has been supported by the u s department of agriculture under grant numbers usdagipsnc5418 and usdag00354009126 the findings and conclusions expressed in this paper are those of the authors and do not necessarily reflect the views of the funding agency 1 these are regional auctions houses where slaughter cattle primarily cull cows and fed steers and heifers and feeder cattle are sold cull cows are animals taken out of a herd and slaughtered because of age inability to produce calves or reduced milk production concerns regarding slaughter cow possessors sharing common purchasing agents have been raised in assessment of the cattle and hog industries calendar year 2000 u s department of agriculture grain inspection packers and stockyards administration june 2001

the collateral value of fine art in this paper we examine the effect of implicit seller reserves on the estimation of value at risk based on historical asset sales data we direct our examination toward how and whether fine art might prove an appropriate form of loan collateral for banks and other financial institutions using a data set of french impressionist paintings brought to auction from 1985 to 2001 we control for the effect of works that are bought in house to construct a distribution of potential sale values that corrects for sample selection bias it turns out that the downside risk surrounding deviations of auction prices from expert presale estimates depends critically on how buy ins are incorporated if downside risk is assessed solely on historical experience with successful auction sales the data appear to support loan to value ratios between 50 and a 100 larger than loan to value ratios that countenance the existence of seller reserves the auction process however is quantifiable and can reveal the necessary risk information required for loan consideration

erratumauction guarantees for works of art this paper addresses the question of whether auction guarantees change the bidding environment and whether they cause a change in price once the value of an item is taken into account we analyze both the cases of third party guarantees and in house guarantees we use two datasets one of christie s and sotheby s contemporary and impressionist evening sales from january 2010 to february 2012 and another larger dataset consisting of all items auctioned at christie s from 2001 to may 2011 while more expensive items are more likely to have guarantees we find little empirical evidence to suggest an effect on price from the guarantee itself once the value of the item is taken into account