bidding behavior in descending and ascending auctions this research examines how individual differences and institutional practices influence consumer bidding in auctions bidders may be motivated by different goals e g thrill of winning the item with minimal attention to what they pay for it versus prudence winning the item at a price at or below its perceived value also innate or auctioneer induced differences may exist in the precision and salience of bidder cognitions about the item s value we report two studies on how these motivational and cognitive factors influence bids in descending and ascending auctions respectively each study also manipulated a situational variable wait time at each price step the two auctions realized different average prices for the same item set average bids were higher in the descending versus ascending auction in several study conditions in both auction formats bidders primed with thrill versus prudence bid higher but more precise and or salient values attenuated this goal effect among other results in the descending auction longer wait times elicited higher bids from bidders primed with thrill but not prudence in the ascending auction longer wait times produced lower bids for bidders primed with prudence but not thrill these findings on consumer bidding behavior have practical implications for auction design

why market rules matter optimizing pumped hydroelectric storage when compensation rules differ abstract policies markets and technologies interact to create the modern electrical system integrating large amounts of electricity generated by variable renewable resources such as from wind and sunlight into electricity systems may require energy storage technologies to synchronize electricity production with electricity demand electricity markets compensate the performance of these energy storage technologies for the services they provide and these markets are often operated by regional independent system operators isos that specify the market rules for this compensation to examine how different iso rules can affect the operation and profitability an energy storage technology we develop a dynamic programming model of pumped hydroelectric storage phes facility operation under the market rules from the midcontinent iso and iso new england we present how differences in rules between these isos produced different operational strategies and profits and how important they are for phes profitability

the minimum wage as a redistributive tool most analyses of the minimum wage focus on its unintended employment consequences the goal of a minimum wage is not of course to reduce employment but to redistribute earnings to low paid workers under what conditions can a minimum accomplish this are those conditions met in economies which otherwise rely extensively on markets to set wages such as the united states which in i994 rejected mandating health benefits that would have effectively raised the minimum or the united kingdom where in i995 the labour party promised a national minimum upon election who pays for the redistribution who benefits the redistributive effects of a minimum wage depend on the labour market and redistributive system in which it operates on the level of the minimum and on its enforcement at best an effective minimum wage will shift the earnings distribution in favour of the low paid and buttress the bottom tiers of the distribution from erosion at worst minimum wages reduce the share of earnings going to the low paid by displacing many from employment neither outcome is certain so that enacting a minimum is a risky but potentially profitable investment in redistribution it is the balancing of risk against gain that makes a minimum so controversial until the i980s i99os competitive labour markets in the united states and united kingdom produced rising real earnings for the low paid and falling earnings inequality so the risk of enacting a national minimum united kingdom or of raising substantially the national minimum united states seemed unnecessary why interfere with the competitive market when it produces socially desirable trends in earnings albeit a bit slower than one might accomplish with a legislated minimum two decades of falling real wages for lower decile workers in the united states and of rising earnings inequality in the united kingdom1 have however put the minimum back in play the job market is not doing much for lower paid workers in the united kingdom virtually all social groups accept the need for some redistribution though they differ on the best way to accomplish such in the united states pressures for tax cuts can be interpreted as a way for employees to gain real wage increases unavailable through the market the consensus favouring redistribution through the earned income tax credit disappeared in the midi 990s rush to reduce federal budget deficits this paper takes as its operating premise the goal of redistributing earnings

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

using regional variation in wages to measure the effects of the federal minimum wage the imposition of a national minimum wage standard provides a natural experiment in which the treatment effect varies across states depending on the fraction of workers initially earning less than the new minimum the author exploits this fact to evaluate the effect of the april 1990 increase in the federal minimum wage on teenagers wages employment and school enrollment comparisons of grouped and individual state data confirm that the rise in the minimum wage increased teenagers wages there is no evidence of corresponding losses in teenage employment or changes in teenage school enrollment

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

how effective is the minimum wage at supporting the poor this study investigates the antipoverty efficacy of minimum wage policies proponents of these policies contend that employment impacts are negligible and suggest that consumers pay for higher labor costs through imperceptible increases in goods prices adopting this empirical scenario the analysis demonstrates that an increase in the national minimum wage produces a value added tax effect on consumer prices that is more regressive than a typical state sales tax and allocates benefits as higher earnings nearly evenly across the income distribution these income transfer outcomes sharply contradict portraying an increase in the minimum wage as an antipoverty initiative

economics and emotion institutions matter abstract in two different types of institutions english and dutch auctions we collect heart rate data a proxy for emotion to test hypotheses based on findings in neural science about the effect of emotion on economic behavior we first demonstrate that recording heart rates does not distort prices in these auctions next we ask if knowledge of the intensity of a participant s emotional state improves our ability to predict price setting behavior beyond predictions of price based on usual economic variables our answer is that institutions matter in the dutch english auctions we find no evidence that knowledge of emotional intensity affects our ability to predict price setting behavior we then entertain the proposition that the cardiac system is an information system that processes economic events we are able to show that this hypothesis is consistent with our observations and furthermore that the processes differ across institutions

minimum wages and the demand for labor i formulate measures of the effective minimum wage based on broad definitions of the labor costs that face employers and use these measures in reestimating some simple equations relating the relative employment of youths and adults to the u s minimum wage using aggregate data for 1954 78 i then ground the model more closely in the theory of factor demand first by adding the relative wages of youths and adults to the equation describing their relative employment and then by specifying a complete system of demand equations for these two types of labor teen employment responds quite robustly to changes in the effective minimum in these specifications with an elasticity of 0 1 a translog cost function defined over young workers adults and capital shows that the effective minimum wage reduces employers ability to substitute other factors for young workers using both sets of results i find that a subminimum wage for youths would have increased their employment with at most a small loss of jobs among adults this abstract was borrowed from another version of this item

estimating the value of electricity storage in pjm arbitrage and some welfare effects significant increases in prices and price volatility of natural gas and electricity have raised interest in the potential economic opportunities for electricity storage in this paper we analyze the arbitrage value of a price taking storage device in pjm during the six year period from 2002 to 2007 to understand the impact of fuel prices transmission constraints efficiency storage capacity and fuel mix the impact of load shifting for larger amounts of storage where reductions in arbitrage are offset by shifts in consumer and producer surplus as well as increases in social welfare from a variety of sources is also considered

employment unemployment and the minimum wage a causality model some empirical work concerning the minimum wage tends to confirm the negative impacts of the law on employment but much of that work leaves the existence and size of the fiat s effects uncertain furthermore many of the theoretical and statistical advances of the past 1 decades have yet to be incorporated into the analysis of the law s effects we apply time series and causality testing analysis developed from the transfer function to the minimum wage employment unemployment series we find some evidence that the minimum wage has lowered the employment of white male teenagers age 16 19 and nonwhite males over the age of 20 however these impacts are small no other significant employment impacts are discovered and no significant unemployment impacts are found additional study of the law s impacts using advanced statistical methods is required

the effect of minimum wage laws on the distribution of employment theory and evidence abstract recent research casts doubt on the view that minimum wage laws reduce employment we show that in a simple model of bilateral search with heterogeneous workers a minimum wage law increases employment however the increased competition from higher productivity workers makes lower productivity workers worse off without making higher productivity workers better off we provide evidence that minimum wage laws shift employment from adults to teenagers and students this raises concerns about the distributional consequences of minimum wages even when they increase employment

anticipated effects of the minimum wage on prices there is little empirical evidence on the effect of minimum wage increases on prices particularly for developing countries this paper provides estimates of this effect using monthly brazilian household and firm data over 18 years as minimum wage increases in brazil sare large and frequent they have a potentially important impact on aggregate prices rational agents in anticipation of such price effects may take minimum wage increases as a signal for future price and wage bargains we find that the minimum wage raises overall prices not only on the month of the increase but also in the two months prior to the change as well as after the change

auction institutional design theory and behavior of simultaneous multiple unit generalizations of the dutch and english auctions historically english and dutch auctions have been used for the exchange of single objects such as works of art or single lots of a good such as produce fish or cut flowers where these institutions have been used for the exchange of multiple units such as the australian wool auction using english rules successive lots of the good are sometimes sold sequentially at auction in some but not all instances this is because the goods are not identical even though the various lots may be close substitutes see penny burns 1985 where the goods are accepted universally as being homogeneous as in the securities markets multiple units are often commonly auctioned simultaneously in the securities industry orders are batched for simultaneous execution in multiple unit auctions in what are referred to as call markets that is the security is called for auction at a particular point in time this type of market is used on the stock exchanges of austria belgium france germany and israel some of these are verbal and some are sealed bid auctions although the u s organized exchanges are predominantly continuous rather than call markets except that call markets are used each day to open trading in each listed security there is a growing number of exceptions such as the proliferation since 1984 of auction preferred stock goldman sachs and co october 1984 and money market preferred stock lehman brothers july 1984 we now have dutch auction rate transferable securities called darts stated rate auction preferred stock or straps and many more after the initial subscription offering of this type of security the market is called every 49 days to reset the preferred dividend rate using a multiple unit auction the exchange of shares and the dividend determination is based on the array of stated dividend rates at which existing holders and potential new holders are willing to sell and or buy corresponding quantities the dividend rate and exchange of shares every 49 days is executed using the uniform price or competitive sealed bid mechanism vernon l smith et al 1980 the discussion to follow will be confined to this sealed bid form of the call market call markets provide temporal consolidation of trade orders or other forms of expressing the desire to buy and sell by comparison with continuous trading call markets offer both advantages and disadvantages robert a schwartz 1988 pp 442 6 the cited advantages include low cost of operating the exchange information aggregation and presumed pricing efficiency price stability individual trades which are thought to have a small impact on price reduced price uncertainty and finally nondiscriminatory pricing however there are offsetting disadvantages 1 the market is inaccessible except at the time of call 2 no bid offer contract or price information is available until the results of the call are announced and 3 there is transaction uncertainty because a submitted bid offer may be too low high to execute inside the supply demand cross these conditions are only partially alleviated if there is a secondary market between calls these disadvantages may be significant in september 1988 the wall street journal published an article on the failure of a call market for the auction rate preferred stock economic science laboratory university of arizona tucson arizona this material is based upon work supported by the national science foundation under grant no ses 8320121

the minimum wage and teenage employment a reanalysis with attention to serial correlation and seasonality we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low

is the time series evidence on minimum wage effects contaminated by publication bias i introduction economists often express concern that the journal review process has the unintended effect of biasing published empirical results towards the rejection of economic null hypotheses in favor of statistically significant results that are consistent with economists priors or predictions in other disciplines meta analyses of published papers generally focusing on clinical trials provide some evidence consistent with a bias towards publication of significant results see for example berlin et al 1989 under the reasonable presumption that the parameter of interest such as the effect of a drug should be constant across studies 1 in economics however the parameters of statistical models are more likely to vary across samples especially when the samples cover different time periods because of changed behavior e g lucas 1976 model misspecification or measurement changes the possibility of parameter instability makes it difficult to apply standard meta analysis techniques to the economics literature because these techniques draw inferences regarding publication bias from changes in estimates across samples 2 in this paper we suggest a method of testing the null hypothesis of no publication bias when parameters are changing in particular if there is a specification that is plausibly free of selective specification search then that specification can be used as a benchmark with which to compare changes in estimates across the published studies a statistical test for whether the changes in estimates across the published studies are significantly different from those for the benchmark specification estimated over different sample periods can then be used to assess the evidence of publication bias in the published studies under consideration we apply our approach to the question of whether there is evidence of publication bias in the time series literature on the employment effects of the minimum wage we choose this application for three reasons first the economic impact of the minimum wage is an important issue for policy second widespread interest in this question has generated sufficient research to make the application of meta analysis techniques feasible third it is the topic of one of the rare applications of meta analysis in economics card and krueger 1995a b we show that when we recognize the special complexities associated with meta analysis of studies using time series data the evidence that the minimum wage literature is contaminated by publication bias is much weaker ii evidence of publication bias the approach used by card and krueger to test for publication bias in the minimum wage literature is relatively straightforward first in the absence of publication bias and if parameters are stable then estimated t statistics for employment effects of minimum wages should rise as the sample period is extended more precisely the log of the absolute t ratios should rise one for one with the log of the square root of the degrees of freedom this is closely related to the approach of berlin et al 1989 who test for publication bias in research from clinical trials by asking whether the estimated magnitudes of the effects in published studies are negatively related to sample sizes the intuition is that if only significant results get published the estimated effect will be bigger when it is based on a smaller sample second a tendency for published t statistics for employment effects to be clustered around two can be interpreted as an indication of publication bias using these techniques card and krueger report evidence that is consistent with publication bias in the minimum wage literature focusing on the existing time series studies that use quarterly data they first report that a regression of the log of the absolute t statistics for the estimated minimum wage effects from these studies on the log of the square root of the degrees of freedom yields a negative coefficient estimate rather than the positive coefficient of one implied by the null hypothesis of no publication bias

stationary data and the effect of the minimum wage on teenage employment one of the interesting features of time series work on the effect of the minimum wage is that the problem of possible spurious regressions when data may be non stationary has been largely ignored it is shown that this is potentially a serious problem it is found that although the teenage employment to population ratio is stationary the independent variables in time series regression equations are non stationary substitution of the stationary first differences of the independent variables in the regression equations for their levels is found to greatly undermine the estimated influence of the minimum wage on the employment to population ratio estimates of the effect of the minimum wage are found to be only marginally more significant when seasonal differencing of the dependent variable and an arch estimation technique are employed

regional effects of the minimum wage on teenage employment previous research on the minimum wage using national level data concludes that the minimum wage has a small effect on the employment of teenagers this paper provides new evidence that there is substantial regional variation in the effect of the minimum wage and in some regions it has a decidedly larger impact on teenage employment than previously measured estimates from a panel data set of the us states suggest that the minimum wage may cause almost a 7 reduction in teenage employment in some regions this results is robust to different econometric specifications and holds whether a relative or real specification of the estimating equation is used

the state federal dichotomy in the effects of minimum wages on teenage employment in the united states abstract for the period 1984 1997 we find that state level minimum wage hikes had no negative employment impact whereas federal hikes did this dichotomy may account for the differences between the results of the new economics of the minimum wage and time series studies