the economics of the internet infrastructure and regulation the purpose of this article is to inform users regulators and economists about the basic economics of the internet focusing on regulation of its infrastructure it defines the internet and describes its development and organization it analyses the regulatory and competition issues associated with conveyance on the internet it then discusses three current puzzles of economic interest while the article reaches several conclusions the overall message is that much more work is needed in this area

industry structure and the speed of price adjustment recent work has suggested that there is an association between the degree of concentration in an industry and the speed at which prices adjust to changes in prime costs cagan 8 domberger 12 13 scherer 21 p 356 and the references cited therein apart from its intrinsic interest to students of industrial economics there would seem to be three reasons for investigating this association first to see what light if any it throws upon the influence of industrial structure on the price level together with the rate and process of inflation secondly to test the assumption made in some influential studies e g godley and nordhaus 15 coutts godley and nordhaus 10 and haig and wood 18 that the size of the lag between cost and price changes is solely dependent upon the length of the fabrication production and delivery period in the various industries the third reason is a belief held by the author that distributed lag coefficients in econometric studies should be subject to analysis and not left hanging in the air as part of the development of a large scale econornetric model of the australian economy the imp model a team of researchers under the direction of dr brain at melbourne university have estimated price prime cost equations for 43 manufacturing sectors using annual data referring to the period 1948 49 1973 74 1 the estimating equation is of the form

optimal pricing in electrical networks over space and time an electrical system is modelled with a transmission network customers central generators and independent generators the system is subject to stochastic failures and stochastic demand parameters optimal spot prices are derived for the system they vary stochastically with space and time and depend on electrical load flow patterns the price difference between two locations or two voltage levels and the wheeling charge between them will change magnitude and sometimes sign over time as a function of events throughout the network current spatial pricing methods are significantly different from the spot price based methods derived here

time of use rates vs hopkinson tariffs redux an analysis of the choice of rate structures in a regulated electricity distribution company abstract recent proposals to restructure the electricity industry in north america may effect the disintegration of a vertically integrated company into several smaller entities including distribution companies discos we explore whether time of use tou pricing or a hopkinson tariff would be more suitable for a regulated disco focusing on the economic efficiency of these alternative rate structures we argue that a hopkinson tariff with demand subscription is superior to tou rates as it can better handle the limited load diversity of local transmission and distribution td demands made on the contemporary disco while finessing the problem of endogenous marginal costs of local td capacity

inventory behaviour and market power an empirical investigation abstract this paper examines the empirical relation between the market power of a firm and the level and variability of its inventories we suggest that firms with greater market power hold more inventories and that their inventories are more volatile these hypotheses were tested on a large sample of industrial firms using two different measures of market power and applying a number of estimation techniques the results strongly support our hypotheses

inventory and price behaviour the point of this paper is that inventory adjustment attenuates downward pressure on price when realized demand is low because firms accumulate inventory hold overs speculating that demand will be stronger in the succeeding period when realized demand is high the firm draws down its inventories until a stock out occurs and price rises to clear the market

collusion fluctuating demand and price rigidity we study an infinitely repeated bertrand game in which an i i d demand shock occurs in each period each firm receives a private signal about the demand shock at the beginning of each period at the end of each period all information but the private signals becomes public we consider the optimal symmetric perfect public equilibrium sppe mainly for patient firms we show that price rigidity arises in the optimal sppe if the accuracy of the private signals is low we also study the implications of more firms and firms impatience on collusive pricing empirical evidence shows that prices in oligopolistic markets tend to be more rigid than prices in competitive markets dixon 1983 carlton 1986 this suggests that collusion may result in firms inflexible pricing behavior it is not obvious however that collusion causes price rigidity why do colluding firms not adjust prices according to changing environments by which they can potentially earn higher profits what limits colluding firms ability to coordinate thereby leading to price rigidity in this article we study how information asymmetry among firms limits colluding firms ability to respond to demand shocks and characterize the conditions under which prices are rigid specifically we consider private information about demand in an infinitely repeated bertrand game with two identical firms in which an i i d binary demand shock occurs in each period each firm receives a conditionally independent private signal about the underlying demand state at the beginning of each period and then charges a price the accuracy of private signals is measured by the probability of receiving a high respectively low signal conditional on a high respectively low underlying demand state therefore the lower the accuracy the higher the degree of informational asymmetry at the end of each period firms observe the underlying demand and the prices but they never observe their rivals signals we adopt symmetric perfect public equilibria sppe as our solution concept which requires that at each period firms pricing schemes

the adoption of new technology by the farmers in taiwan this study addresses the technologies the farmers adopted their reasons for adopting these technologies and the result of adopting these technologies the design and strategy used to collect the data needed are both qualitative and quantitative farmers who practised traditional farming methods and those who adopted the new technologies were both given survey questionnaires and were interviewed the result of the study shows that the technologies applied by the farmers are the use of tractors in tilling the ground the use of machinery in planting the practice of irrigation and the use of a combination of organic and commercial fertilizers the reasons for the adoption of the latter are the availability of chemicals and the convenience of their use and this is used to enhance the growth of plants the results of the new technology adoption are high yields of produce production of hybrid crops and the saving of labour thus increasing the income of the farmers

manufactured exports of developing countries and their terms of trade since 1965 a comment abstract the results of sarkar and singer 1991 on the trends in the relative unit values of the manufactured exports of developing countries are sensitive to the choice of end year and to fluctuations in the unit values of us exports relative to those of the rest of the world the relative unit values of us exports are highly correlated with movements in the us real exchange rate and there is some evidence to suggest that sarkar and singer s findings primarily reflect changes in the real exchange rates of developing countries

subsidy free pricing of interruptible service contracts abstract this article analyzes the issue of cross subsidy in the pricing structure of a utility offering interruptible service contracts utilizing a simple theoretical model in which available capacity is subject to random shocks we derive a set of sufficient conditions for the presence of subsidies in the pricing of priority service we find that low priority customers receive no subsidies whenever they pay prices in excess of variable costs a test for subsidies to high priority customers is derived that can be implemented utilizing available information extensions of the analysis are discussed

efficient pricing and investment in electricity markets with intermittent resources facing growing technological and environmental challenges the electricity industry needs effective pricing mechanism to promote efficient risk management and investment decisions in a restructured electricity market with competitive wholesale prices and traditionally regulated retail rates however there are technical and institutional barriers that prevent dynamic pricing with price responsive demand in regions with limited energy storage capacity intermittent renewable resources present special challenges this could adversely affect the effectiveness of public policies causing inefficient investments in energy technologies in this paper we present an updated economic model of pricing and investment in restructured electricity market and use the model in a simulation study for an initial assessment of renewable energy strategy and alternative pricing mechanisms a key objective of the study is to shed light on the policy issues so that effective decisions can be made to improve efficiency

simple menus of contracts in cost based procurement and regulation in an influential paper jean jacques laffont and jean tirole 1986 formulated a principal agent model of cost based procurement and regulation and showed that the principal can implement the optimal mechanism by offering the agent a menu consisting of a continuum of linear contracts two related problems with applying this theory in practice have been that the economic logic and the underlying mathematics involved in calculating the optimal menu are quite complex and the principal must be able to specify the agent s entire disutility of effort function in order to calculate the optimal menu as a result the model has not been widely used in practice to either calculate actual incentive contracts or even to develop useful qualitative guidance about the nature of the optimal solution and how it is affected by various economic factors the purpose of this paper is to show that dramatically simpler menus which are easy to understand and calculate and which have lower informational requirements can at least in some cases capture a substantial share of the gains achievable by the fully optimal complex menu in particular this paper considers two item menus where one item is a cost reimbursement contract and the other item is a fixed price contract such menus are called fixed price cost reimbursement fpcr menus for the case where the agent s utility is quadratic and the agent s type is distributed uniformly it is shown that the optimal fpcr menu always captures at least three quarters of the gain that the optimal complex menu achieves where the gain is measured relative to the result of using a cost reimbursement contract this paper s research was originally motivated by a policy issue in defense procurement in the united states the department of defense dod purchases almost all major weapons systems from sole source contractors using contracting methods that essentially amount to using cost reimbursement contracts the best way to understand why dod uses costreimbursement contracting methods is that they perform precisely the function identified in laffont and tirole s principal agent model they guarantee in a situation that amounts to a bilateral monopoly that dod and the firm can reach an agreement i e they guarantee that the agent will always produce the good of course the use of cost reimbursement contracting methods

towards applied geographical economics modelling relative wage rates incomes and prices for the regions of great britain one of the key issues surrounding geographical economics is whether the theory can be made operational so that proper investigations can be made of the basic theoretical assumptions and practical use can be made of the model s predictions at a detailed spatial level in this paper the model formalized by fujita et al 1999 is developed in the context of 36 regions of great britain enabling direct comparisons with observed wage rate data that are used to calibrate the model iceberg transport costs are in the form of an exponential function and a power function for the range of parameters considered the power function gives a better fit between model and data suggesting scale economies in transportation the paper shows that in spite of the assumptions that have to be made quite realistic distributions of relative wages income and prices are attainable however caution is required in the interpretation of these simulations which in no way provide proof of new economic geography theory which cl

the distribution of price changes in oligopoly econometric analysis of the skew of price change distributions for an eighty industry sample over an eleven year period indicates that the distributions are less skewed in times of rapidly changing prices in concentrated oligopolies and in markets with little product heterogeneity the results provide evidence of less price staggering and greater pricing coordination by firms in times of high inflation and in oligopolistic markets respectively tight oligopolies also appear to have more symmetric distributions when prices are falling than when they are rising suggesting that price decreases are more readily followed than increases copyright 1993 by blackwell publishing ltd

electricity rationing through a two stage mechanism analysis of interruptible service mechanisms has focused on the efficiency losses due to the absence of complete contingent contracts there exists a second type of inefficiency which to a large extent has been ignored it originates from the fact that the relative order or ranking of consumers willingness to pay for a given quantity generally varies throughout the contract period a more general model of electricity demand allowing for changes in the order of consumer willingness to pay for a given quantity is presented under such demand conditions the use of a two stage rationing mechanism is proposed rationing plans which maximize expected aggregate surplus are established in the first stage the second stage consists in a market for allocation rights to be operated once the states of nature are revealed allocations under this two stage mechanism are shown to be pareto superior to existing rationing plans directions for future research are discussed

assessing economic activities an example from central business districts the central business district cbd is a dynamic part of the city that changes drastically over time and responds to forces and demands for activities from within and from other countries however it is extremely difficult to quantify the various propositions put forward for measuring economic activities in the cbd due to the paucity of statistical data planning intervention thus becomes extremely difficult as other forces beyond the control or knowledge of the planner play crucial roles in determining what activities will locate in the cbd and where they will locate this study attempts to explore a view of how to measure and assess central business district economic activities for planning purposes it follows a critical discussion of the nature of the cbd by pointing to empirical studies including examples from the new york metropolitan region and the city of london moreover it discusses indicators could be used to measure and assess economic activities in the cbd by highlighting planning purpos

simple competitive internet pricing abstract it is widely recognised that pricing is required to control congestion on the internet one lesson that has emerged from many proposals is that any price system should be simple and robust to competition this is highlighted in the question currently under debate in the market for internet services should usage prices should be employed at all in a duopoly model with overall positive network effects it is shown that flat rate pricing can occur in equilibrium even when the costs of measuring variable demand are very small

unemployment a survey this paper presents a survey of the economics of unemployment it covers competitive and imperfect competition models the role of different methods of wage determination and explanation of postwar unemployment patterns in the oecd countries copyright 1990 by royal economic society

trade openness and inflation the role of real and nominal price rigidities the paper revisits the long standing question of the impact of trade openness on the inflation output trade off by accounting for the effects of product market competition on price flexibility the study develops a new keynesian open economy dynamic stochastic general equilibrium model with non constant price elasticity of demand and calvo price setting in which the frequency of price adjustment is endogenously determined it demonstrates that trade openness has two opposing effects on the sensitivity of inflation to output fluctuations on the one hand it raises strategic complementarity in firms pricing decisions and the degree of real price rigidities which makes inflation less responsive to changes in real marginal cost on the other hand it strengthens firms incentives to adjust their prices thereby reducing the degree of nominal price rigidities and increasing the sensitivity of inflation to changes in marginal cost the study explains the positive relationship between competition and the frequency of price adjustment observed in the data it also provides new insights into the effects of global economic integration on the phillips curve

the value of commuting time in an empirical on the job search model an application based on moments from two samples this article estimates the value of commuting time voct among swedish males in an empirical on the job search model it uses a large sample of employee establishment linked data obtained from administrative registers the sample lacks information on mode choice for the journey to work we therefore estimate a mode choice model on another sample and use this model to link the administrative data to the relevant set of travel times costs and distances the voct is found to be 1 8 times the net hourly wage rate in the sample the relatively high estimate results from a high voct among cohabiting men

priority service pricing investment and market organization tingent forward delivery contracts offered by a seller each customer s selection of one contract from the menu determines the customer s service order or priority in each contingency the seller rations supplies by serving customers in order of their selected priorities until the supply is exhausted or all customers are served various forms of priority service are widely

efficient and competitive rationing abstract the contracts that interest us here are called priority service contracts the salient feature of such contracts is that they specify each customer s priority in obtaining service that is they specify the tank order in which a customer is served out of the available supply until all customers are served or supply is exhausted such contracts essentially establish queues for customers in section 1 the author provides some background about priority service section 2 formulates a basic model and offer several illustrations also describes two main examples that motivate the theoretical development section 3 derives some key results that show how the prices of priority service contracts are designed to induce customers to self select efficient service orders in section 4 the author discusses various ways that state enterprises can organize markets that implement priority service efficiently in section 5 we study the operation of competitive markets for priority service section 6 concludes with some summary remarks two themes are emphasized one is that a state enterprise can promote substantial efficiency gains by substituting priority service for absent spot markets the other is that oligopolistic firms may have insufficient incentives to offer efficient product diversity consequently allocative efficiency depends on entry of numerous firms even so dispersal of supplies among many firms can prevent productive efficiency when there are advantages from pooling supplies

the long run link between money growth and inflation is inflation always a monetary phenomenon many economists believe that the link between money growth and inflation in the u s has weakened over the last two decades due in part to the federal reserve s policy experiment in 1979 1982 and innovations in the financial sector of the economy i find that the long run relationship between money growth and inflation is strong in a statistical sense and important economically the key result is that the trend or growth component in cpi inflation is entirely due to the trend component of monetary base growth jel c32 e31 e51

two tier pricing of shared facilities in a free entry equilibrium we explore how well the market will provide shared facilities which are subject to congestion it is usually efficient to have multiple facilities because it is more efficient to spend resources on facilities than to endure crowding costs we assume firms can charge a membership price and a visit price we present a symmetric nash equilibrium in these two prices we show that ifthe number offirms is large the membership price will be small thus the membership price is a measure of market power when entry occurs in response to positive profit but such that entry is deterred by the prospect of negative profit in a symmetric nash equilibrium the endogenous number offirms is bounded below by one fewer than the efficient number thefees paid by a client converge to an appropriately defined competitive price as the economy is replicated

socially optimal procurement with tight budgets and rationing abstract we investigate the behaviour of a social planner that secures the supply of a good e g an environmental benefit through contracting with private agents while the social planner seeks to maximise net social benefits she is also controlled with a fixed budget private agents are profit maximising and hold private information concerning their variable costs of production they also have known fixed costs of contracting we find that budget constraints and fixed costs change the optimal contract design in more than one way the social planner minimises costs rations high cost contracts to reduce fixed costs and information rents and distorts contracts for all agent types including low cost agents we find that rationing improves social welfare also even though social costs including tax distortion are explicitly taken into consideration they do not affect the design of optimal contracts when budgets are tight in those cases the budget constraint dominates the solution

competition among sellers who offer auctions instead of prices abstract in this paper we study a large market in which sellers compete by offering auctions to buyers instead of simple fixed price contracts two variants of the model are studied one extends a model first analyzed by wolinsky rev econ stud 55 1988 71 84 in which buyers learn their valuations only after meeting sellers the other variant extends the model of mcafee econometrica61 1993 1281 1312 in which buyers know their valuations before they choose among available auctions the equilibrium array of auctions is characterized for each case and the efficiency properties of the equilibria are analyzed journal of economic literatureclassification numbers d41 d44 d82

competition and inflation differentials in emu in a monetary union inflation rate differentials may be substantial over the business cycle this paper parameterizes a two country monetary union in which different economic structures in the two countries generate temporary inflation differentials cross country differences are introduced in i the elasticity of demand in the goods markets which cause producers to discriminate prices ii the degree of price inertia and iii the degree of openness or preference for foreign goods in consumption the model is calibrated to reproduce two average large emu countries and it is able to generate such inflation differentials we find the mechanism of price discrimination quantitatively more important than the differences in price inertia moreover under asymmetric shocks differences in the degree of openness such as those observed within the emu can have sizeable effects on the dispersion of inflation rates

flexible and semiflexible consumer demands with quadratic engel curves in this paper we introduce three flexible consumer demand systems in which expenditures on goods are quadratic functions of income we view these alternatives as to the demand systems used heretofore in the empirical modeling of rank three demands namely those in which expenditure shares are quadratic functions of the logarithm of income curvature conditions required by theory can be imposed locally during the estimation for each and a semiflexible version can be estimated for illustrative purposes we estimate various forms of two of the systems using canadian data on seven categories of goods for the period 1947 to 1995

involuntary unemployment and worker self selection abstract consider a firm that lacks information about the reservation wage or ability of any specific worker but is aware that workers with higher reservation wages tend to be more able on average we show that under a simple condition that the efficiency wage exceeds the lowest reservation wage the optimal hiring policy for the firm involves 1 no wage discrimination and 2 rationing of jobs when demand for its product is low the result also extends to the case where hours of work are variable provided each worker is most productive when working a strictly positive number of hours per week

price dynamics in uk manufacturing a microeconomic view this paper examines the response of prices to cost and demand shocks in seventy five three digit and four digit industries in the united kingdom during the 1980s the results suggest that prices responded sluggishly to costs but virtually not at all to demand the short run response to materials and fuel shocks was much larger than the response to unit labor cost shocks and some of this difference persisted into the long run prices responded more sluggishly to cost and demand shocks when aggregate inflation was lower and finally pricing dynamics were more sluggish in less competitive industries copyright 1992 by the london school of economics and political science

advance purchase discounts and monopoly allocation of capacity optimal pricing by a monopoly airline that faces capacity constraints during the peak demand period is studied the existence of capacity constraints means that in order to expand output the airline must divert demand from the peak period to the off peak period a particular advance purchase discount policy is shown to be the profit maximizing method of selling tickets if the advance purchase requirement were infeasible output and total surplus would both be lower jel l12 substantial discounts for air travel are generally available to travelers who are willing to purchase tickets a week or more in advance of the departure date this paper demonstrates why the imposition of an advance purchase requirement may be a profit maximizing strategy for a monopoly airline facing capacity constraints during times of peak demand 1 the practice of imposing an advance purchase requirement on discount tickets is also placed in a favorable light in terms of its impact on social

a test of price sluggishness in the simple rational expectations model u k i950 i980 a recurrent feature of the empirical output and price equations derived from simple rational expectations models is that the effects of nominal shocks persist for a long period of time in barro s i977 a unemployment equation unanticipated monetary growth influences unemployment with lags of up to 2 years in his price equation barro i 98 i unanticipated money has a lag of up to 5 years in the price equation fitted to uk data by attfield et al i 98i real money balances influence prices with a one year lag and unanticipated monetary growth influences them with a 2 year lag of course the existence of lags is neither necessary nor sufficient for the negation of the neutrality proposition of rational expectations models lucas i975 sargent 1979 and blinder and fischer i98i have provided rationales for the existence of lags in the supply equation and demonstrated their consistency with the neutrality proposition similarly the work of attfield et al i98i has indicated that lagged adjustments in the demand for money are also consistent with neutrality in both cases the combination of lagged adjustments with perfectly flexible market clearing prices yields all the neutrality propositions of the models of lucas and others however it is also the case that traditional keynesian type models with sluggish price adjustment imply lags in output and price equations the final equations with keynesian type lags may look very similar to the equations derived by lucas barro and others but their implications about the effectiveness of policy may be very different in the model with sluggish price adjustment supply is not equal to demand so some other rule will have to be found to determine employment and output anticipated monetary policy may be able to influence real economic variables if the employment and output rules are not specifically designed to offset the effects of anticipated policy for this reason a strong test of the neutrality proposition should be able to differentiate between different sources of lags and be able to identify them empirically if the test consists merely of a reduced form equation that identifies the lags and a rationalisation of them that is consistent with the neutrality proposition it can provide only weak evidence which may also be consistent

equilibrium price dispersion under demand uncertainty the roles of costly capacity and market structure when capacity is costly and prices are set in advance firms facing uncertain demand will sell output at multiple prices and limit the quantity available at each price i show that the optimal price strategy of a monopolist and the unique pure strategy nash equilibria of oligopolists both exhibit intrafirm price dispersion moreover as the market becomes more competitive prices become more dispersed a pattern documented in the airline industry while generating similar predictions the model differs from the revenue management literature because it disregards market segmentation and fare restrictions that screen customers

heterogeneity in price rigidity evidence from a case study using microlevel data we combine two data sets to study price rigidity the first consists of weekly time series of retail wholesale and spot prices for twelve products these time series contain two exogenous cost shocks we find that prices exhibit more rigidity in response to the second shock than the first the second data set consists of all publicly available information about the shocks content analysis of these information reveals that the first shock is larger and more persistent and the market has more information on it than the second we conclude therefore that prices are more flexible in response to cost shocks that are larger that are more persistent and on which market participants have more information

dynamic model for market competition and price rigidity abstractthis article presents a price floor model in which durability unit costs and production period are factors in explaining price rigidity this article elaborates that cost structure plays an essential role in resolving the inconclusive relationship between market concentration and price rigidity when the industry is characterized by decreasing returns of scale the degree of price flexibility decreases as market competition intensifies the reverse is true when the industry exhibits increasing returns of scale the factors that cause price rigidity also foster price adjustment asymmetry and price adjustment lag during times of recession the model exhibits upward price flexibility as costs increase but downward price rigidity as costs decrease even under forward looking expectations the way in which firms adjust prices could look as though they have adaptive expectations if price stickiness is a characteristic of market competition then public policies determined by price level could be too

monopoly price dispersion under demand uncertainty when a monopolist sets its price before its demand is known then it may set more than one price and limit the availability of its output at lower prices this article adds demand uncertainty and price rigidities to the standard model of monopoly pricing when there are two states of demand and the ex post monopoly price is greater when demand is high then the monopolist s optimal ex ante pricing strategy is to set two prices and limit purchases at the lower price

collusive price rigidity under price matching punishments by analysing an infinitely repeated game where unit costs alternate stochastically between low and high states and where firms follow a price matching punishment strategy we demonstrate that the best collusive prices are rigid over time when the two cost levels are sufficiently close this provides game theoretic support for the results of the kinked demand curve in contrast to the kinked demand curve it also generates predictions regarding the level and the determinants of the best collusive price which in turn has implications for the corresponding collusive profits the relationships between such price rigidity and the expected duration of a high cost phase the degree of product differentiation and the number of firms in the market are also investigated

price rigidities and market structure conventional wisdom has it that a large part of the explanation of keynesian unemployment is the observed rigidities of wages and prices what has been lacking however is a satisfactory theory or conjunction of theories which explains how wages and prices can be at non market clearing levels the objective of this paper is to sketch out several alternative theoretical explanations of this phenomenon each in contrast with keynesian theory is consistent with the observation that as the economy goes into a recession real product wages do not increase and may in fact decrease all of the theories assume rational profit maximizing firms and all entail some important departure from the standard competitive paradigm the first three explanations represent minor adaptations of standard models

holiday price rigidity and cost of price adjustment the thanksgiving christmas holiday period is a major sales period for us retailers due to higher store traffic tasks such as restocking shelves handling customers questions and inquiries running cash registers cleaning and bagging become more urgent during holidays as a result the holiday period opportunity cost of price adjustment may increase dramatically for retail stores which should lead to greater price rigidity during holidays we test this prediction using weekly retail scanner price data from a major midwestern supermarket chain we find that indeed prices are more rigid during holiday periods than non holiday periods for example the econometric model we estimate suggests that the probability of a price change is lower during holiday periods even after accounting for cost changes moreover we find that the probability of a price change increases with the size of the cost change during both the holiday as well as non holiday periods we argue that these findings are best explained by higher price adjustment costs menu cost the retailers face during the holiday periods our data provides a natural experiment for studying variation in price rigidity because most aspects of market environment such as market structure industry concentration the nature of long term relationships contractual arrangements etc do not vary between holiday and nonholiday periods we therefore are able to rule out these commonly used alternative explanations for the price rigidity and conclude that the menu cost theory offers the best explanation for the holiday period price rigidity

communication and efficiency in auctions abstract we study auctions under restricted communication agents have valuations distributed over an interval but can only report one of a finite number of messages we provide necessary conditions for welfare as well as revenue maximizing auctions in the independent private values case when bidders report simultaneously we also show that the seller who chooses how to allocate a fixed number of messages allocates them evenly over all agents

information and usage of congestible facilities under different pricing regimes uncertainty about usage conditions is common in many congestible facilities in this paper the authors consider the effects of providing information to prospective users under three regimes free access nonresponsive congestion tolling and responsive tolling based on current information with either free access or nonresponsive tolling better information can induce changes in usage that reduce expected social surplus but responsive tolling assures that better information is welfare improving the joint welfare gains from providing information and tolling can be larger or smaller than the sum of the gains from implementing each independently superadditivity is likely to obtain when demand is price elastic

on the equivalence of walrasian and non walrasian equilibria in contract markets the case of complete contracts this paper explores two models of an economy in which contracts are exchanged in the first model contracts are exchanged on a competitive market in which traders expectations concerning conditions that prevail within specific markets adjust until markets clear in the second model contract designers compete directly against one another by offering alternate contracts it is shown that walrasian allocations correspond with the equilibrium allocations in the model with direct competition when the number of traders is made large furthermore the expectational assumptions that drive the walrasian analysis coincide with off the equilibrium path conjectures in the problem with direct competition