should government fund assisted reproductive techniques a study using willingness to pay during recent years there has been a growth in the use of assisted reproductive techniques arts across europe america and australia this has resulted in debates about whether health insurance should cover this procedure this study used the closed ended ce willingness to pay wtp technique to establish the value the infertile place on in vitro fertilization ivf treatment in scotland the intention is to consider the use of the economic instrument of wtp for informing the debate on the public provision of ivf assuming that the value of the service outweighs the cost public provision should be encouraged the responses suggested that users of the service have a mean wtp of over 5000 for an attempt at ivf this compares with an average government expenditure of 7pound 2700 the internal validity of the ce wtp was also shown with income being positively related to wtp it is concluded that the ce wtp technique is potentially a useful tool for policy makers in considering the public provision of i

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

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

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

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

rationing rules and european central bank auctions abstract theoretical analyses of multi unit auctions tend to side step the importance of rationing rules by assuming strictly decreasing aggregate demand however under european central bank rules bidders are allowed to submit no more than ten price quantity pairs so even if the underlying demand is strictly decreasing it is likely that several bidders may submit a market clearing bid if at the market clearing bid excess demand exists it is necessary to ration how much each bidder receives the effect on bidding behavior and equilibrium revenues under two distinct rationing rules is explored in this paper

auctions with a stochastic number of bidders abstract auction theory is generalized by allowing the number of bidders to be stochastic in a first price sealed bid auction with bidders having constant absolute risk aversion the expected selling price is higher when the bidders do not know how many other bidders there are than when they do know this thus the seller should conceal the number of bidders if he can moreover a bidder s ex ante expected utility is the same whether or not there is a policy of concealing the number of bidders concealment therefore pareto dominates announcement with risk neutral bidders the optimal auction is the same whether or not the bidders know who their competitors are

comparative reliability of the dichotomous choice and open ended contingent valuation techniques abstract the comparative reliability of dichotomous choice and open ended contingent valuation methods cvm is evaluated by resurvey of the same households 9 months after their original survey test retest correlations on willingness to pay are statistically significant at the 1 level and range from 0 57 for the dichotomous choice cvm to 0 62 for the open ended cvm the test retest correlations were not statistically different between dichotomous choice and open ended cvm a likelihood ratio test for temporal stability of each method s willingness to pay functions indicates stability half of the time for both methods

eliciting preferences for collectively financed health programmes the willingness to assign approach improving public involvement in health system decision making stands as a primary health policy goal however still limited guidance is available on how best to elicit preferences for health care programmes this study examines a contingent choice technique to elicit preferences among health programmes and named willingness to assign wtas wtas reveals relative monetary based values of a set of competing public programmes under a hypothetical healthcare budget assessment experimental evidence is reported from a deliberative empirical study valuing ten health programmes in the context of the catalan health service evidence from this experimental study reveals that within the context of multiple programmes preferences are internally more consistent and slightly less affected by preference reversals as compared to values revealed from an adapted technique eliciting the willingness to pay wtp extra taxes another finding suggests that although programmes promoting health received the higher rel

multi unit pay your bid auctions with variable awards abstract multi unit auctions in which bidders can win a variable number of units differ significantly from multi unit auctions in which bidders can only win one unit in an independent private values pay your bid auction where bidders may win up to two units we show that first order conditions imply separating and pooling of bids must both occur with positive probability this behavior is not found in multi unit uniform price auctions it also contrasts with asymmetric first price auctions of a single good whose first order conditions are superficially similar a uniform distribution example is analyzed numerically journal of economic literature classification numbers d44 d82 c72

specification of the logit model the case of valuation of nonmarket goods abstract we address the proper specification of the logit model for estimation of nonmarket commodity demand economic theory is used to show the conditions which must be met by the logit functional form if it is to yield valid estimates of welfare change measures and demand relationships an empirical example is used to illustrate the argument recreational boating data were collected using the contingent valuation method cvm in texas in one instance the demand curve is positively sloped due to the specific functional form chosen the estimated demand curve for the theoretically preferred functional form has the expected negative slope

the relevance of a choice of auction format in a competitive environment we examine the relevance of an auction format in a competitive environment by comparing uniform and discriminatory price auctions with many bidders in a private values setting we show that if the number of objects for sale is small relative to the number of bidders then all equilibria of both auctions are approximately efficient and lead to approximately the same revenue when the number of objects for sale is proportional to the number of bidders then the particulars of the auction format matter all equilibria of the uniform auction are efficient while all of the equilibria of the discriminatory auction are inefficient the relative revenue rankings of the auction formats can go in either direction depending on the specifics of the environment these conclusions regarding the efficiency and revenue ranking are in contrast to the previous literature which focused on the case of independent information across agents

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

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 bid selection for dichotomous choice contingent valuation surveys abstract this paper develops a model for optimal survey design for the dichotomous choice contingent valuation method that finds the bid amounts as well as the sample sizes corresponding to each bid the model uses an iterative procedure to select the survey design that minimizes the mean square error of the welfare measure a set of monte carlo simulations shows that the model produces significantly lower mean squared errors for the welfare estimate than the next best model produces survey design under alternative assumptions regarding the statistical distribution of the welfare measure is also addressed the model produced significantly different survey designs depending on whether the distribution was assumed to be symmetric or asymmetric

application of stochastic choice modeling to policy analysis of public goods a case study of air quality improvements this paper demonstrates the applicability of the stochastic choice method in performing policy analysis of changes in public goods using survey data the air quality problem studied involves air pollution control for the tampa bay area of florida and relatively simple choices between changes in a public good and disposable income it illustrates the use of surveys as a public forum in which preferences are revealed 26 references 2 tables

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

the loser s curse and information aggregation in common value auctions we consider an auction in which k identical objects of unknown value are auctioned off to n bidders the k highest bidders get an object and pay the k 1st bid bidders receive a signal that provides information about the value of the object we characterize the unique symmetric equilibrium of this auction we then consider a sequence of auctions a r with n r bidders and k r objects we show that price converges in probability to the true value of the object if and only if both k r and n r k r i e both the number of objects and the number of bidders who do not receive an object go to infinity

overbidding and inefficiencies in multi unit vickrey auctions for normal goods abstract i examine bid behavior in uniform price auctions and multi unit vickrey auctions without the standard quasilinearity restriction on bidder preferences instead of assuming quasilinearity i assume that bidders have weakly positive wealth effects i e the goods are normal goods my setting nests quasilinearity but also allows for budget constraints financial constraints and risk aversion i show that without the quasilinearity restriction truthful reporting is not a dominant strategy in the vickrey auction instead bidders truthfully demand for their first unit and weakly overreport their demand for later units the incentive to overreport demand means that the vickrey auction is generally inefficient this mirrors the well known demand reduction results in uniform price auctions moreover the efficiency ranking of the two auctions is ambiguous in fact there are cases where the uniform price auction is pareto efficient and the vickrey auction is pareto inefficient even if only one bidder has non quasilinear preferences

validation of empirical measures of welfare change a comparison of nonmarket techniques since the passing of the flood control act of 1936 the attention of many resource economists has been directed towards measuring the benefits and costs of alternative uses of natural resources increasingly it has been recognized that the value of some of these uses is not explicitly determined through market transactions this has led to the focus of much attention upon the development of nonmarket methods to estimate the value of these uses in the 1940s the groundwork for the travel cost method was established by hotelling prewitt 1949 following this in the 1960s davis initiated the basic foundation for bidding methods davis 1963 which were later to be subsumed under the heading of contingent valuation methods brookshire randall and stoll 1980 schulze d arge and brookshire 1981 thayer 1981 both of these methods will be further discussed below in addition to these two methods a third approach the unit day value method has been recognized as acceptable but not preferred for the valuation of recreational uses of water and related land resources dwyer kelley and bowes 1977 u s water resources council 1979 given the existence of alternative methods of estimating the value of resource uses several obvious questions arise one of the first of these is under what circumstances is each method most appropriate existing literature has focussed sufficiently on this question and pointed out limitations of each especially the travel cost method and unit day value methods brookshire ives and schulze 1976 dwyer kelly and bowes 1977 freeman 1979 mcconnell 1975 randall ives and eastman 1977 schulze d arge and brook

consumers preferences for the attributes of post pc results of a contingent ranking study with the explosive growth of the internet and the change in consumer demand post pc is emerging as a substitute for the existing desktop pc and laptop pc post pc is a new computer which is portable with wireless networking cheaper than the existing pc and specializing in the specific functions that consumers want rudimentary post pcs such as pda web pad and smart phone are already in use in the future owing to technological progress the heterogeneity of related companies and the low entry barrier various post pcs will be developed this paper attempts to analyse consumers willingness to pay wtp for post pc with such attributes as portability cpu speed data input method using key board or electric pen monitor size and price to this end a contingent ranking method is applied which makes the respondents rank hypothetical post pc alternatives featuring various combinations of attributes via a survey data collected in korea using the estimated wtp the shape and the capacity of future po

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

numerical analysis of asymmetric first price auctions abstract we propose numerical algorithms for solving first price auction problems where bidders draw independent valuations from heterogeneous distributions the heterogeneity analyzed in this work is what might naturally emerge when subsets of distributionally homogeneous bidders collude bid functions and expected revenues are calculated for two special cases extensions to more general asymmetric first price auctions are discussed journal of economic literature classification numbers d44 c63 c72 d82

gathering information before signing a contract after being offered a contract an agent has the possibility to observe the state of nature this enables him to refuse the contract in unfavorable states but burdens him with an observation cost the authors show that the principal offers a contract in which the agent has no incentive to observe the state of nature and they explore its terms later they show that the principal finds it profitable to organize competition between several agents even though he has monopoly power and can push a single agent down to his reservation utility copyright 1992 by american economic association

information provision before a contract is offered this paper considers an agency model in which the agent can update the principal s belief before the contract is offered we identify that the agent who has a bad potential to perform the task has a small chance to receive information rent but if he receives it he receives a large amount thus the agent may choose to provide more information that shifts the principal s belief to the negative direction if the prior belief is optimistic

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

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

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

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

use of dichotomous choice nonmarket methods to value the whooping crane resource market prices for endangered wildlife species rarely exist when prices do exist they arc not likely to reflect accurately individual preferences both consumptive uses such as hunting fishing and trapping boyle and bishop 1985 stou and johnson brookshire eubanks and randall and more esoteric benefits such as viewing and existence values must be considered this article is addressed to the valuation of whooping cranes grus americana a prominent endangered species the purpose of this article is to present a methodology for estimating nonconsumptive benefits associated with the existence of an endangered species a dichotomous choice form of contingent valuation is applied to quantify individuals economic surplus associated with preservation of the whooping crane resource specific issues and limitations of the empirical approach are discussed some of which have been previously examined by bishop and heberlein 1979 and hanemann the present paper expands upon earlier work in several ways fit in addition to discussing the above issues a unique application of the approach to an endangered species is presented second three model specifications are examined two of which arc consistent with utility theory and one which is not hanemann ti again following hanemann economic surplus is estimated at the sample median as well as the mean the dii cussion of the last two issues sheds sit on their implications for estimation of economic surplus throughout the article the suitability of alternative estimation techniques for dichom mous choice or referendum style data is examined the methodological and empirical results are relevant to a number of cumnt issues regarding model specification choice of binary response model and choice of estimator for equivalent surplus hanemann boyle and bishop 1984 sellar chavas and stoll

disappointment and dynamic consistency in choice under uncertainty the central proposition of disappointment theory is that an individual forms expectations about uncertain prospects and that if the actual consequence turns out to be worse than or better than that expectation the individual experiences a sensation of disappointment or elation generating a decrement or increment of utility which modifies the basic utility derived from the consequence by incorporating a simple disappointment elation function into a model of individual choice many observed violations of conventional expected utility axioms including violations of savage s sure thing principle and the isolation effect can be predicted and defended as rational and dynamically consistent behaviour

the value of ignorance this article provides a new perspective on the information structure of an agent in a standard model of adverse selection before the contracting takes place the agent has the opportunity to gather private information on a relevant parameter that affects final payoffs i allow for the possibility that the agent remains uninformed with some probability the agent s optimal choice of information structure is derived and it is shown that in the case of two states of nature the possibility of remaining ignorant has a positive strategic value for the agent since a poor information structure generates strategic benefits there will be no equilibrium in which the agent is perfectly informed even if additional information is costless at the margin

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

welfare measurements using contingent valuation a comparison of techniques three commonly used techniques of asking contingent valuation questions are compared iterative bidding payment cards and dichotomous choice the results reveal that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses the iterative bidding estimates contain a starting point bias while the payment card and dichotomous choice estimates were influenced by the interviewers soliciting the contingent values finally the analysis of dichotomous choice responses involves unresolved issues that warrant further investigation on the other hand dichotomous choice is the easiest technique to administer in a survey setting

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

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

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

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

inference and optimal design for a welfare measure in dichotomous choice contingent valuation this paper considers the use of contingent valuation to estimate non market benefits from separately valued nested goods survey respondents were asked referendum wtp questions regarding either a scheme to protect the whole area of a wetland or a

a two stage sequential auction with multi unit demands abstract working within the independent private values paradigm i examine a sequence of two second price auctions where individual bidders have diminishing marginal valuations equilibria are characterized for complete and incomplete informational settings when information is complete allocations can be inefficient and price sequences are constant or decreasing however when information is incomplete and symmetric equilibrium behavior produces efficient outcomes and an expectation of increasing prices these divergent findings are reconciled using an argument based on ex ante bidder asymmetry that can also explain the declining price anomaly finally comparisons to other auctions are made in terms efficiency and revenue generation journal of economic literatureclassification number d44

first price auctions in the asymmetric n bidder case i consider the first price auction when the bidders valuations may be differently distributed i show that every bayesian equilibrium is an essentially pure equilibrium formed by bid functions whose inverses are solutions of a system of differential equations with boundary conditions i then prove the existence of an equilibrium i prove its uniqueness when the valuation distributions have a mass point at the lower extremity of the support i give sufficient conditions for uniqueness when every valuation distribution is one of two atomless distributions i establish inequalities between equilibrium strategies when relations of stochastic dominance exist between valuation distributions

revenue equivalence in multi object auctions abstract the theory of auctions suggests that under certain conditions seemingly different methods for auctioning a single object will result in the same expected price this result extends quite easily to the case of more than one object

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

intergenerational transfers and the accumulation of wealth h t ouseholds acquire wealth from two sources they save out of income they have earned and they receive transfers from other people the first method of wealth accumulation goes under the name of life cycle saving in which people save during their working lives and dissave after retirement the second involves either an inter vivos transfer that is a transfer between living people or a bequest a transfer that occurs at the death of the donor while inter vivos transfers and bequests will arise in dynastic models where preferences include a taste for the well being of one s descendents few empirical life cycle models reflect these concerns indeed a sharp debate has arisen over the ability of the simple life cycle model to explain observed wealth accumulation understanding the relative sizes of these sources of wealth accumulation affects a variety of issues for example the effects of government debt social insurance public transfer programs estate taxes and incentives for charitable giving depend to some extent on the magnitude and nature of private saving and transfers of wealth analyses of the inequality of wealth may depend on whether most of wealth is earned or received as transfers appropriate policies for encouraging private saving may look rather different depending on whether most saving is to be consumed later in life or passed along to the next generation finally evidence on transfer patterns relates to more fundamental

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

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

efficiency of large double auctions we consider large double auctions with private values values need be neither symmetric nor independent multiple units may be owned or desired participation may be stochastic we introduce a very mild notion of a little independence we prove that all nontrivial equilibria of auctions that satisfy this notion are asymptotically efficient for any alpha 0 inefficiency disappears at rate 1 n 2 alpha