repeated rounds with price feedback in experimental auction valuation an adversarial collaboration it is generally thought that market outcomes are improved with the provision of market information as a result the use of repeated rounds with price feedback has become standard practice in the applied experimental auction valuation literature we conducted two experiments to determine how rationally subjects behave with and without price feedback in a second price auction results from an auction for lotteries show that subjects exposed to price feedback are significantly more likely to commit preference reversals however this irrationality diminishes in later rounds results from an induced value auction indicate that price feedback caused greater deviations from the nash equilibrium bidding strategy our results suggest that while bidding on the same item repeatedly improves auction outcomes this improvement is not the result of price feedback

the role of training in experimental auctions in this paper we examine the role of providing extensive training to subjects in the context of experimental auctions we conducted an experiment where we auctioned several lotteries with varying payoffs one group of subjects was extensively trained while another group of subjects was only minimally trained we find that subjects in the extensive training treatment were submitting bids significantly higher than subjects in the minimal training treatment suggesting that subjects without proper training may underreport their wtp

on the existence of sunspot equilibria in an overlapping generations model abstract the existence of sunspot equilibria is shown in a one commodity overlapping generations model without stationarity assumptions on preferences endowments or nominal taxes the essential assumption is that there is a continuum of perfect foresight equilibria the technique is also useful for constructing stationary sunspot equilibria when they exist consumption in a sunspot equilibrium is shown to lie within the range consistent with perfect foresight

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

adjustment costs and indeterminacy in perfect foresight models abstract this paper suggests a method for resolving indeterminacy of equilibrium in perfect foresight models and applies it to several existing models quadratic adjustment costs are introduced into models with multiple equilibria and the limiting behavior of the resulting solutions is studied as the adjustment costs go to zero the method is shown to be useful in selecting among feasible equilibria in examples in which there is local indeterminacy

uniqueness of steady states in models with overlapping generations in this paper we examine the likelihood of multiple real steady states in deterministic exchange economies with overlapping generations there is a single good and a single agent per generation with constant relative risk aversion expected utility in order to test for multiple equilibria we employ methods from computational algebraic geometry in our examples we find that multiplicity becomes less likely as the life span of agents increases but becomes more likely as the coefficient of risk aversion increases for moderate values of risk aversion multiplicity is very unlikely when agents live for five or more periods jel c61 c63 d50 d58

do practice rounds affect experimental auction results researchers use practice rounds to familiarize participants with experimental auction mechanisms we find a positive correlation between practice bids and bids submitted in later rounds we consider three explanations for this correlation a behavioral anchoring effect a tendency for some auction participants to be more free spending and misconception of the experimental auction s demand revealing qualities

stationary sunspot equilibria in a finance constrained economy abstract stationary sunspot equilibria are shown to exist in a production economy with infinite lived agents when it is not possible to borrow against future wage income equilibrium fluctuations exhibit persistence over time scales of the same order of magnitude as observed business cycles an active fiscal policy that stabilizes aggregate money expenditures can prevent such fluctuations

determinacy of equilibrium in stationary economies with both finite and infinite lived consumers abstract we consider the determinacy of perfect foresight equilibrium near steady state equilibria of stationary infinite horizon economies the work of t j kehoe and d k levine econometrica 53 1985 433 453 is generalized by the inclusion of both infinite lived agents and overlapping generations of finite lived agents and the inclusion of production and non depreciating pure rents we show that indeterminacy is possible in robust examples and that the dimension of the indeterminacy can be as large as the number of goods per period we also discuss extreme cases in which determinacy is guaranteed

the overlapping generations model iii the case of log linear utility functions existence of competitive equilibria in the overlapping generations model has been studied in some detail see 4 6 9 we need to know more about the properties of these equilibria how many are there how do they depend on the basic parameters of the economy we also need to compare the set of monetary competitive equilibria with the set of nonmonetary competitive equilibria are there vastly more monetary equilibria than nonmonetary equilibria analysis of the properties of competitive equilibria is for the overlappinggenerations model an important but difficult task in his seminal article 8 samuelson put it this way if we take any finite stretch of time and write out the equilibrium conditions we always find them containing discount rates from before the finite period and discount rates from afterward we never seem to get enough equations lengthening our time periods turns out always to add as many new unknowns as it supplies equations samuelson suggested that rather than facing this difficulty directly we can try to cut the gordian knot by our special assumption of stationariness

renewable resource use and nonseparable amenity benefits we incorporate amenity benefits into an overlapping generations model with a renewable resource as a factor of production source of amenity benefits and store of value unlike the conventional renewable resource problems studied under the assumption of additive consumption and amenity benefits we let amenity benefits affect the utility of consumers in a nonseparable fashion we examine the role that weights given to consumption and amenities have for harvesting and the resource stock we characterize dynamics and stability of steady state equilibria with a logistic resource growth function we demonstrate in parametric and numerical models that the weights given to consumption and amenities in the utility function matter substantially for the steady state equilibrium stock and its stability and dynamics both conventional saddle point equilibria and indeterminacy with infinite number of equilibria and saddle node bifurcation is possible depending on the weights given to consumption and amenities in addition we show that for each inefficient equilibrium stock there is a unique subsidy rate that can move the economy from an inefficient equilibrium to an efficient one the presence of indeterminacy provides a challenge to resource policies because the system becomes unpredictable therefore expectations and market psychology may play an important role in resource utilization and provision of amenities

social status education and growth this paper investigates the implications of social rewards on the allocation of talent in society and consequently on the process of economic growth we consider two sources of heterogeneity among workers nonwage income and innate ability a greater emphasis on status may induce the wrong individuals that is those with low ability and high wealth to acquire schooling causing workers with high ability and low wealth to leave the growth enhancing industries this crowding out effect taken alone discourages growth growth may be enhanced by a more egalitarian distribution of wealth which reduces the demand for status

endogenous market incompleteness without market frictions dynamic suboptimality of competitive equilibrium in multiperiod overlapping generations economies abstract in this paper we show that within the set of stochastic three period lived olg economies with productive assets such as land markets are necessarily sequentially incomplete and agents in the model do not share risk optimally we start by characterizing perfect risk sharing and find that it requires state dependent consumption claims which depend only on the exogenous shock realizations we show then that the recursive competitive equilibrium of any overlapping generations economy with weakly more than three generations is not strongly stationary this then allows us to show directly that there are short run pareto improvements possible in terms of risk sharing and hence that the recursive competitive equilibrium is not pareto optimal we then show that a financial reform which eliminates the equity asset and replaces it with zero net supply insurance contracts arrow securities will implement to pareto optimal stochastic steady state known to exist in the model finally we also show via numerical simulations that a system of government taxes and transfers can lead to a pareto improvement over the competitive equilibrium in the model

comparative statics and perfect foresight in infinite horizon economies does a pure exchange economy with an infinite time horizon have determinate perfect foresight equilibria when there is a finite number of infinitely lived agents equilibria are generically determinate this is not true with overlapping generations of finitely lived agents we ask whether the initial conditions together with the requirement of convergence to a steady state locally determine an equilibrium price path in this framework there are many economies with isolated equilibria many with continua of equilibria and many with no equilibria at all with two or more goods in every period not only can the price level be indeterminate but relative prices as well furthermore such indeterminacy can occur whether or not there is fiat money and whether or not the equilibria are pareto efficient this paper considers whether infinite horizon economies have determinate perfect foresight equilibria this question is of crucial importance if instead equilibria are locally indeterminate not only are we unable to make comparative static predictions but the agents in the model are unable to determine the consequences of unanticipated shocks the idea underlying perfect foresight is that agents expectations should be the actual future sequence predicted by the model if the model does not make determinate predictions the concept of perfect foresight is meaningless we consider two extreme cases the first with a finite number of infinitely lived consumers and the second with an infinite number of finitely lived consumers an overlapping generations model both are models of stationary pure exchange economies no production including the storage of goods between periods can occur these models are unrealistic but are the easiest to study extensions of the results of this paper to models with production infinitely lived assets and mixtures of the two types of consumers are presented by muller and woodford 29 when there is a finite number of infinitely lived consumers we argue that equilibria are generically determinate this is because the effective number of equations determining equilibria is not infinite but equal to the number of agents minus one and must determine the marginal utility of income for all but one agent generically near an equilibrium these equations are independent and exactly determine the unknowns when there are infinitely many overlapping generations this reasoning breaks down an infinite number of equations is not necessarily sufficient to determine

weakly democratic regular tax equilibria in a local public goods economy with perfect consumer mobility in this paper we study the existence of equilibria in a local public goods economy which has the following structure there are a finite number of geographical regions each region has a government which provides public goods locally by buying private goods inputs on competitive markets and transforming these inputs into outputs of public goods by using a convex technology the local public goods are pure in the sense that all the local residents consume the total produced with no spillovers to other regions each regional government raises revenue from the residents of its region to cover the costs of the public goods it provides the local governments are assumed to be weakly democratic in the sense that no public sector proposal that is a vector of public good provisions and a tax scheme to pay for it will be enacted for which there exists an alternative proposal which is unanimously preferred by the local residents note that it is not being assumed that unanimity is a necessary condition for a public sector proposal to be enacted private goods are produced by price taking profit maximizing producers using convex technologies and are traded across regions a continuum of price taking utility maximizing consumers who are perfectly mobile across regions treat parametrically the public sector proposals of the various local governments in deciding where to live there are a finite number of different types of consumers with type defined by a consumer s preferences initial endowments and share of private sector profits a feasible allocation is a specification of a partition of the consumers among the regions a vector of technically feasible public good provisions and an associated vector of private good inputs used in its production for

the economics of indeterminacy in overlapping generations models abstract recent research indicates that there are robust examples of overlapping generations economies in which there are indeterminate equilibria without fiat money and equilibria with more than one dimension of indeterminacy this paper presents simple examples of a stationary pure exchange overlapping generations economy with one good in each period and a representative consumer who lives for three periods in each generation these examples exhibit every possible form of indeterminacy and instability furthermore the parameters of the principal example agree with empirical evidence we use our examples as case studies for analyzing the problems involved in computing the equilibria of such economies

intertemporal separability in overlapping generations models abstract in a pure exchange overlapping generations model with many goods but a single consumer with preferences separable between two periods of life there are generically finitely many equilibria in which money has no value if money has value then generically there is at most one dimension of indeterminacy this property does not generalize to a model with many consumers and general preferences it is shown why a separable representative consumer implies such strong conclusions it is also shown that the absence of income effects leads to similar results

intertemporally separable overlapping generations economies abstract intertemporally separable overlapping generations economies typically have a sequentially finite number of equilibria though the equilibrium set may even with probability 1 be uncountable

expectations in stability and in viability in realistic overlapping cohorts models abstract in this paper we shall consider the multi cohort generalization of overlapping generations models namely overlapping cohorts olc models each time period consumers of different ages form expectations on future interest rates and conditionally maximize utility arising from their remaining consumption paths under the condition of zero bequest for every time period a coordinator determines the new interest rate to ensure that the total consumption is equal to the total endowment of the society the message of the paper is the following 1 in olc the dynamics generated by rational expectations is frequently not only unstable but unviable 2 in olc the dynamics generated by naive expectations is practically asymptotically stable and viable around the lower steady state

sraffian indeterminacy a critical discussion this paper is aimed at discussing mandler s interpretation of sraffa s price theory in particular we will analyse mandler s idea that an institutional determination of distribution suggested by sraffa could be solidly advanced only in the case of equilibrium price indeterminacy in intertemporal sequential models first it will be shown that this kind of indeterminacy arises from an arbitrary use of the tendency to a uniform rate of return on the supply prices of capital goods second it will be remarked that when sraffa s contribution is placed as it should within the classical theory of value and distribution no price or sraffian indeterminacy will result finally we will argue that mandler s emphasis on the non arbitrariness of the capital goods endowments which is at the root of his indeterminacy result naturally leads to refer to those normal positions of the economy whose only possible consistent determination is sraffa s price theory copyright the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press