empirical implications of equilibrium bidding in first price symmetric common value auctions this paper studies federal auctions for wildcat leases on the outer continental shelf from 1954 to 1970 these are leases where bidders privately acquire at some cost noisy but equally informative signals about the amount of oil and gas that may be present we develop tests of rational and equilibrium bidding in a common values model that are implemented using data on bids and ex post values we also use data on tract location and exposr values to test the comparative static prediction that bidders may bid less aggressively in common value auctions when they expect more competition we find that bidders are aware of the winner s curse and their bidding is largely consistent with equilibrium

relative earnings and individual union membership in the united kingdom considerable attention has been focused in recent years on the empirical analysis of the effect of trade unions on the structure of earnings such empirical investigation usually entails measurement of the union non union differential in wages or earnings at the level of the individual this involves comparison of the earnings of union members with estimates of what their earnings would be were they not union members or equivalently examination of differences in earnings between individuals comparable with regard to all other relevant characteristics who differ in their union membership alone in the united kingdom all previous attempts at estimation of this differential have used aggregate data at either the industry or occupation level 1 the conventional methodology involves regression of the logarithm of the average wage on either the proportion of workers who are union members or the proportion covered by a collective agreement together with a vector of industry characteristics that are deemed to determine the non union wage however several problems are immediately apparent with this methodology first the model ignores the possibility of variation in the differential across industries which has potentially serious consequences second the vector of other characteristics customarily used is somewhat limited and raises doubts concerning the adequacy of the standardization for what might loosely be termed labour quality third only a sub sample of industries is ever used owing to lack of data those industries excluded are generally smaller in terms of employment that those included if the differential varies with the size of the industry a further bias will be induced all of these problems are either removed or lessened by the use of individual level data for an analysis of their impact at the industry level see geroski and stewart 1981 2 as a result it is now widely accepted that the appropriate way to measure such differentials is to use micro data sets at the level of the individual worker until recently suitable data have not been available for the united kingdom and hence such analysis was not possible this paper presents the first estimates for the united kingdom based on individual level data if the value of the union non union differential were the same for all workers in the unionized sector analysis at the industry level and the individual level would produce similar results however the marshallian laws of derived demand suggest that this will not be the case despite this clear prediction of variation in the differential there has been little systematic investigation of the variation this paper also presents such an analysis since variation in the differential across industries results in aggregation bias in industry level studies such an analysis is of considerable relevance to the evaluation of the evidence from such studies as well as being of interest in its own right the paper is laid out as follows section i presents a method of estimating the union non union differential at the individual level while section ii

rising household diesel consumption in the united states a cause for concern evidence on asymmetric pricing papers in the literature have thus far overlooked the projected increase in u s diesel car share when looking at asymmetries in petroleum pricing this paper addresses this issue by comparing retail gasoline and diesel prices in order to see whether they rise faster than they fall given the price of their upstream input crude oil this phenomenon has been termed in the literature as rockets and feathers we apply the threshold vector error correction model tvecm of hansen and seo 2002 which has not yet been applied in the literature we account for the 2008 structural break to crude oil and petroleum prices by splitting the sample using evidence from the recent structural break unit root test of kim and perron 2009 both markets seem to price symmetrically before the 2008 break but we find evidence of asymmetric pricing after 2008 in diesel prices and not in gasoline prices given that the diesel market is small relative to the gasoline market and therefore more open to price exploitation the ongoing cost increases associated with the policy of switching to ultra low sulphur diesel ulsd from 2006 to 2010 could be at the heart of this asymmetry with this in mind the u s federal trade commission should monitor diesel prices as the market share grows in order to ensure that consumers are not adversely affected c 2012 elsevier b v all rights reserved

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

cointegration and threshold adjustment this article proposes an extension to the engle granger testing strategy by permitting asymmetry in the adjustment toward equilibrium in two different ways we demonstrate that our test has good power and size properties over the engle granger test when there are asymmetric departures from equilibrium we consider an application namely whether there exists cointegration among interest rates for instruments with different maturities this issue has been widely tested with mixed results we argue that either cautious policy or possibly opportunistic behavior on the part of the federal reserve implies that an equilibrium relationship between short and long term interest rates exists but that adjustments from disequilibrium are asymmetric in nature empirical tests using u s yields confirm the asymmetric nature of error correction among interest rates of different maturities

approximation in mechanism design with interdependent values abstract this paper studies the revenue maximization problem in environments wherein buyers have interdependent values and correlated types we show that 1 when the system of feasible sets is a matroid and buyer valuations satisfy a single crossing condition the generalized vickrey clarke groves mechanisms with lazy reserves vcg l are ex post incentive compatible and ex post individually rational 2 if in addition the valuation distribution satisfies a generalized monotone hazard rate condition the vcg l mechanism with conditional monopoly reserves is approximately optimal then we construct an ascending auction that implements the truth telling equilibrium of a vcg l mechanism in ex post equilibrium finally we discuss the connection between the vcg l mechanisms and greedy algorithms studied in lehmann et al 2002 and deferred acceptance auctions studied in milgrom and segal 2014 and the impact of competition by proving a bulow and klemperer 1996 type result

an empirical study of an auction with asymmetric information this paper examines federal auctions for drain age leases on the outer continental shelf from 1959 to 1969 these are leases that are adjacent to tracts on which a deposit has been discovered the authors find that the data strongly support the hypotheses that neighbor firms are better informed about the value of a lease than nonneighbor firms that neighbor firms coordinate their bidding decisions and that both types of firms bid strategically in accordance with the bayesian nash equilibrium model for first price sealed bid auctions with asymmetric information

regional earnings convergence the case of northern ireland black b 1985 regional earnings convergence the case of northern ireland reg studies 19 1 7 this paper analyses the rapid increase in the earnings of northern ireland male manual workers relative to the united kingdom average which has taken place in recent decades it identifies four factors which help explain this convergence first there has been a big increase in hours worked in northern ireland relative to the uk average since 1961 second the influence of changing industrial structure is highlighted in addition the impact of a range of government policies and developments in the institutional process of pay determination on earnings is examined the paper concludes that the convergence reflects the erosion of regional distinctiveness as earnings levels are increasingly influenced by national factors

wage determination in britain is there a local dimension church a and hutchinson g 1989 wage determination in britain is there a local dimension reg studies 23 289 300 this study presents an empirical regression analysis of wage determination in the five labour markets of motherwell preston reading torquay and the london borough of newham the data source is a newly available questionnaire survey of approximately 1 000 establishments undertaken in 1984 5 the explanatory variables include the plant s size ownership industrial type three proxies for labour quality the proportion of youths the proportion of females and the proportion of part time workers and a union recognition dummy variable the results discuss the relative importance of both national and local influences on pay levels church a et hutchinson g 1989 la determination des salaires en grande bretagne est ce qu il y a un optique local reg studies 23 289 300 cet article presente une analyse empirique de regression de la determination des salaires dans cinq bassins d empl

symmetric or asymmetric price adjustments in the oil market an empirical analysis of the relations between international and domestic prices in the federal republic of germany 1972 89 abstract this paper investigates how german consumer and wholesale prices for gasoline and light heating oil react to changes in the corresponding rotterdam prices monthly data from 1972 to 1989 are employed and the subperiods of the 1970s 1972 to 1979 and 1980s 1980 1989 are distinguished error correction models are estimated to seperate long run equilibrium relations and short run adjustment processes for the 1980s we find rapid symmetric and full adjustment of the german prices to the rotterdam prices whereas during the 1970s we find some asymmetries and at least for gasoline the adjustment processes took considerably more time

the effectiveness of english auctions abstract we study the performance of the english auction under different assumptions about the seller s degree of bayesian sophistication we define the effectiveness of an auction as the ratio between the expected revenue it generates for the seller and the expected valuation of the object to the bidder with the highest valuation total surplus we identify tight lower bounds on the effectiveness of the english auction for general private values environments and for private values environments where bidders valuations are non negatively correlated for example when the seller faces 12 bidders who the seller believes have non negatively correlated valuations whose expectations are at least as high as 60 of the maximal possible valuation an english auction with no reserve price generates an expected price that is more than 80 of the value of the object to the bidder with the highest valuation

forecasting the oil gasoline price relationship do asymmetries help abstract according to the rockets and feathers hypothesis rfh the transmission mechanism of positive and negative changes in the price of crude oil to the price of gasoline is asymmetric although there have been many contributions documenting that downstream prices are more reactive to increases than to decreases in upstream prices little is known about the forecasting performance of econometric models incorporating asymmetric price transmission from crude oil to gasoline in this paper we fill this gap by comparing point sign and probability forecasts from a variety of asymmetric ecm a ecm and threshold autoregressive ecm tar ecm specifications against a standard ecm forecasts from a ecm and tar ecm subsume the rfh while the ecm implies symmetric price transmission from crude oil to gasoline we quantify the forecast accuracy gains due to incorporating the rfh in predictive models for the prices of gasoline and diesel we show that as far as point forecasts are involved the rfh does not lead to significant improvements while it can be exploited to produce more accurate sign and probability forecasts finally we highlight that the forecasting performance of the estimated models is time varying

an efficient ascending bid auction for multiple objects when bidders exhibit multi unit demands standard auction methods generally yield inefficient outcomes this article proposes a new ascending bid auction for homogeneous goods such as treasury bills or telecommunications spectrum the auctioneer announces a price and bidders respond with quantities items are awarded at the current price whenever they are clinched and the price is incremented until the market clears with private values this dynamic auction yields the same outcome as the sealed bid vickrey auction but has advantages of simplicity and privacy preservation with interdependent values this auction may retain efficiency whereas the vickrey auction suffers from a generalized winner s curse

a threshold cointegration analysis of asymmetric price transmission from crude oil to gasoline prices abstract this study provides new supportive evidence for asymmetric adjustment in u s retail gasoline prices the asymmetric transmission is found to occur not just through the spot markets of crude oil and refinery gasoline but also through their future markets further evidence also shows that the observed asymmetry in price transmission primarily occurs downstream not upstream of the transmission process

an ascending vickrey auction for selling bases of a matroid consider selling bundles of indivisible goods to buyers with concave utilities that are additively separable in money and goods we propose an ascending auction for the case when the seller is constrained to sell bundles whose elements form a basis of a matroid it extends easily to polymatroids applications include scheduling allocation of homogeneous goods and spatially distributed markets among others our ascending auction induces buyers to bid truthfully and returns the economically efficient basis unlike other ascending auctions for this environment ours runs in pseudopolynomial or polynomial time furthermore we prove the impossibility of an ascending auction for nonmatroidal independence set systems

correlated information and mechanism design in models of asymmetric information possession of private information leads to rents for the possessors this induces mechanism designers to distort away from efficiency the authors show that this is an artifact of the presumption that information is independently distributed rent extraction in a large class of mechanism design games is analyzed and a necessary and sufficient condition for arbitrarily small rents to private information is provided additionally the two person bargaining game is shown to have an efficient solution under first order stochastic dominance and a hazard rate condition similar conditions allow full rent extraction in milgrom weber auctions

do gasoline prices exhibit asymmetry not usually previous studies have found evidence of asymmetric price adjustment in u s retail gasoline prices in that gasoline prices rise more rapidly in response to a cost increase than fall in response to a cost decrease by estimating a threshold cointegration model that allows for multiple regimes i am able to test how sensitive this result is to outlying observations in contrast to previous studies i find little evidence of asymmetry for the vast majority of observations and that the asymmetry is being driven by a small number of outlying observations

optimal pricing mechanisms with unknown demand the standard profit maximizing multi unit auction intersects the submitted demand curve with a preset reservation supply curve which is determined using the distribution from which the buyers valuations are drawn however when this distribution is unknown a preset supply curve cannot maximize monopoly profits the optimal pricing mechanism in this situation sets a price to each buyer on the basis of the demand distribution inferred statistically from other buyers bids the resulting profit converges to the optimal monopoly profit with known demand as the number of buyers goes to infinity and convergence can be substantially faster than with sequential price experimentation

is there an asymmetry in the response of diesel and petrol prices to crude oil price changes evidence from new zealand this paper examines how pre tax petrol and diesel prices in new zealand respond to changes in crude oil prices using an asymmetric error correction model our results show that oil companies adjust diesel prices upwards faster than they adjust them downwards and the difference is statistically significant however we find no statistical evidence for an asymmetry in the adjustment of petrol prices even though the magnitude of estimated coefficients suggests a faster response to rising prices as diesel pricing is not as competitive as petrol pricing calls for further government actions and monitoring of the oil market may be justified our findings also have important implications for the conduct of monetary policy as the pass through of crude oil price changes can affect cost push inflation

asymmetries outliers and structural stability in the us gasoline market abstract by using a recently developed nonlinear cointegration methodology and a sample that encompasses more than thirty years of monthly data we investigate whether the transmission of crude oil price variations to gasoline prices in the us market is asymmetric i e depends on the sign of the change in the explanatory variable considering both the long and the short run the model is further extended by taking separately into account the effects of extreme and mild changes in crude oil prices this allows us to verify whether and to what extent the size and shape of any observed asymmetry in pricing is affected by the presence of outliers moreover given the substantial length of the sample considered we test for the possible presence of multiple structural breaks of unknown timing in the cointegrating vector our results indicate that the relationship between the prices of gasoline and crude oil has undergone a single structural break in the late 2008 and that after the break extreme observations have a non negligible role in shaping asymmetry

migration intentions in the u k which households want to migrate and which succeed the authors extend their earlier study of the impact of the council housing system on migration in the united kingdom in particular they examine the hypothesis that individuals differ in various unobserved ways and that personal characteristics that result in individuals becoming tenants may also discourage migration data are from the general household survey for 1973 and 1974 and pertain to both migration intentions and past migration the extent to which house tenure and other household characteristics affect the probability that a household embarking on a housing search will be successful in realizing its migration intentions is explored in addition the importance of both individual and aggregate local unemployment in determining migration intentions is discussed

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

approximation in mechanism design this paper considers three challenge areas for mechanism design and describes the role approximation plays in resolving them challenge 1 optimal mechanisms are finely tuned to precise details of the distribution on agent preferences challenge 2 in environments with multi dimensional agent preferences economic analysis has failed to provide general characterizations optimal mechanisms challenge 3 optimal mechanisms are parameterized by unrealistic knowledge of the distribution of agents private preferences this paper surveys positive resolutions to these challenges with emphasis on basic techniques and their relevance to theory and practice

union relative wage effects a survey of macro estimates this paper surveys union wage effect estimates drawn from empirical cross section wage equations fitted to macro aggregated data in 34 post 1963 studies containing such equations each estimate is the partial derivative of the dependent wage variable in logarithmic units with respect to the extent of unionism fraction unionized variable in the equation this paper shows that these estimates contain a mixture in uncertain ratio of the union nonunion wage differential or wage gap on the one hand and an extent of unionism effect on the other therefore the macro estimates should not be interpreted as wage gap estimates

multi item auctions a collection of items is to be distributed among several bidders and each bidder is to receive at most one item assuming that the bidders place some monetary value on each of the items it has been shown that there is a unique vector of equilibrium prices that is optimal in a suitable sense for the bidders in this paper we describe two dynamic auction mechanisms one achieves this equilibrium and the other approximates it to any desired degree of accuracy

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

an efficient multi unit ascending auction we provide an ascending auction that yields an e cient outcome when there are many identical units for sale and bidders have interdependent values and downward sloping demand our ascending auction both extends and generalizes ausubel s 1997 and yields the same outcome as perry and reny s 2000 generalization of vickrey s 1961 sealed bid auction there are two key components to our auction bidders are permitted both to

rockets and feathers meet markup margins applications to the oil and gasoline industry this article investigates the existence of asymmetric price transmission between crude oil rack wholesale and retail gasoline prices a threshold cointegration technique is used with regime switches being triggered by the size of the markup margin there is consistent evidence of band tar in which the crude rack and retail prices are free to diverge until the markup margin is squeezed or stretched beyond a lower or upper critical threshold this finding indicates that abnormally high markup margins cannot be sustained which provides evidence against market power exertion the threshold error correction models indicate that there is no systematic relationship between the speed of adjustment back to the long run relationship and the markup margin which rules out the existence of rockets and feathers

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers