the relationship between exchange rates and interest rate differentials a wavelet approach this paper uses wavelet analysis to investigate the relationship between the spot exchange rate and interest rate differential for seven pairs of countries with a small country sweden included

efficiency and information aggregation in auctions the tension between allocative efficiency and information aggregation is explored in the context of an auction k identical objects of unknown quality are auctioned off to n bidders whose tastes affect their valuation of an object of given quality bidders receive a signal about the quality of the objects the k highest bidders get an object and pay a price equal to the k first highest bid we find conditions under which in the limit objects are allocated efficiently to those with the highest tastes and price converges in probability to the value of an object to the marginal taste type

auctions with resale when private values are uncertain evidence from the lab and field abstract auction theory represents one of the richest areas of research in economics over the past three decades yet whether and to what extent the introduction of secondary resale markets influences bidding behavior in sealed bid first price auctions remains under researched this study begins by examining field data from a unique data set that includes nearly 3000 auctions over 10 000 individual bids for cutting rights of standing timber in british columbia from 1996 to 2000 in comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not we find evidence that is consistent with theory critical evaluation of the reduced form bidding model however reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types we therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted theoretical effect we find that while it does have the predicted effect a theoretical model based on risk averse bidders explains the overall data patterns more accurately than a model based on risk neutral bidders beyond testing theory the paper highlights the inferential power of combining naturally occurring data with laboratory data

information spillovers gains from trade and interventions in frozen markets we study government interventions in markets suffering from adverse selection importantly asymmetric information prevents both the realization of gains from trade and the production of information that is valuable to other market participants we find a fundamental tension in maximizing welfare while some intervention is required to restore trading too much intervention depletes trade of its informational content we characterize the optimal policy that balances these two considerations and explore how it depends on features of the environment our model can be used to study a program introduced in 2009 to restore information production in the market for legacy assets

the probability of sale and price premiums in withdrawn auctioned properties this paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently the empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price reserve and opening bid the findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself factors such as auction participation the number of individual bidders and the number of bids are significant in a number of the alternative specifications

forecasting the exchange rate a monetary or random walk phenomenon abstract this paper evaluates the forecasting accuracy of monetary and random walk models of the exchange rate instrumental variable estimates of the simple monetary model are not supported by the data while the full information maximum liklihood estimates of its rational expectations counterpart are the rational expectations monetary model is operationalized using the results of hansen and sargent 1980 and flavin 1981 and box jenkins time series techniques monthly data on the us and uk economics over the recent flexible exchange rate period serve as the case study

the possibility of informationally efficient markets abstract a rational expectations equilibrium with positive demand for financial information does exist under fully revealing asset price contrary to a wide held conjecture whereas a continuum of investors is inconsistent with fully revealing equilibrium finitely many investors with average portfolios demand information in equilibrium if they can adjust portfolio size in an additive signal return model more information diminishes the expected excess return of a risky asset so that investors who only have a choice of portfolio composition or whose asset endowments strongly differ from the average portfolio are worse off under fully revealing price information market equilibria both with and without information acquisition are pareto efficient

the effects of stock market growth and renewable energy use on co2 emissions evidence from g20 countries the primary objective of this study is to empirically examine the effect of stock market growth and foreign direct investment fdi inflows on co2 emissions further this study investigates the impact of renewable energy consumption on co2 emissions and economic output in a panel of the g20 countries the empirical analysis was carried out on the full sample as well as on sub samples of developed and developing economies of the g20 member countries the results confirm a significant long run equilibrium relationship among the variables across the panels further the long run elasticities suggest that fdi significantly reduces co2 emissions in the full sample and developing economies while stock market growth reduces in developed economies similarly the renewable energy consumption substantially reduces co2 emissions and increases economic output across the panels our findings have important policy implications for instance the policy makers have to initiate effective policies to promote the renewable energy sources to meet the increasing demand for energy by replacing the use of conventional energy such as coal gas and oil this will therefore help to reduce the co2 emissions and also ensure sustainable economic development in the g20 nations

do renewable energy technology innovations promote china s green productivity growth fresh evidence from partially linear functional coefficient models abstract renewable energy technology innovation can benefit the environment by promoting green productivity as proposed by existing theoretical studies however recent uneven developments of both environmental performance and renewable energy technology among regions in china remind us to revisit the above theoretical link in this paper we relax the hypothesized homogeneity and linearity in traditional empirical models to investigate the effects of renewable energy technology innovation on china s green productivity the results of the partially linear functional coefficient models show that the effect of renewable energy technological innovation on green productivity is significant only when the relative income level of a province passes a critical turning point beyond the turning point such an effect increases with the growth of relative income levels finally we provide provincial specific policy implications based on the estimated nonparametric relationship between renewable energy technology innovation and green productivity

how to effectively stabilize china s commodity price fluctuations abstract the bulk commodities are basic goods and their price fluctuations are directly related to the stability of a country s macro economy investigating the main driving forces of the commodity price fluctuations is the key to stabilizing the macro economy ignoring the objective facts that there are a large number of nonlinear relationships between economic variables most of the existing scholars use the linear models to commodity price fluctuations to compensate for the shortcomings of existing research this paper uses the nonparametric additive regression model with data driven features to investigate the main driving forces of china s commodity price fluctuations the results show that exchange rate has an early promotion late inhibition inverse u shaped nonlinear effect on commodity price fluctuations because the renminbi appreciates in the early stages but depreciates in the later stages the nonlinear impact of the real economy also appears an inverted u shaped pattern due to the changes in growth mode of the real economy similarly international oil price produces an inverted u shaped nonlinear effect owing to the rise in international oil prices in the early stages and the decline in the later stages however the money supply has an early inhibition late promotion positive u shaped nonlinear effect on commodity prices therefore government departments should formulate targeted policies over time to effectively stabilize china s commodity prices

is the linkage principle valid evidence from the field we present field evidence involving experienced bidders tha t supports the linkage principle specifically the prediction that in affiliat ed values auction environments the expected revenues generated at open outcry ascending bid english auctions are higher than those under other auction formats that reveal less information to participants using field data from a large seller of automobiles whi ch experimented with different selling formats we find that the seller s average r evenues were significantly higher under an english auction than under a dynamic internet auction that revealed far less information to bidders 1 introduction and motivation in an influential and classic paper milgrom and weber 1982 derived a powerful result and coined the term linkage principle to describe it simply put in auction environments having affiliated values the linkage principle state s that a seller can expect to increase revenues by providing more information to bidders both before and during the auction an implication of the linkage principle is that open outcry ascending price auctions often referred to as english auctions will on average earn more revenue for the seller than sealed bid auctions under which no information is released or similar auction formats that reveal less information to pot ential buyers according to perry and reny 1999 the linkage principle has come to be considered one of the fundamental lessons provided by auction theory well known exceptions to the linkage principle exist for example within independent private values environments the celebrated revenue equivalence theorem first outlined by vickrey 1961 1962 and then proven by riley and samuelson 1981 as well as myerson 1981 states that any auction format that has the same probability of assigning a winning bidder generates the same expected revenue to the seller in particular the revenue equivalence theorem predicts that the expected revenues earned by the seller at sealed bid auctions will be the same as those earned at english auctions at least when the distribution from which the values are drawn is the same for all potential buyers who are also risk neutral thus the presence of some degree of dependence or a common value component in the signals of potential buyers is critical to the validity of the linkage princi ple the affiliated values model is a generalization of the common value model developed by wilson 1977 under affiliation the conditional expectation of any monotonic function of the signals of all bidders is an increasing function of any individual bidder s own signal when the signals of bidders are dependent in this manner information released by the seller or information the seller provides concerning the bids made by other participants by virtue of the seller s choice of auction format helps bidders refine their beliefs concer ning the true value of the object for sale which in turn induces them to bid more aggressively than they would in the absence of such information while one can imagine circumstances under which the release of information could adversely affect the outcome at an auction for example if the seller released information concerning problems with the object for sale or when low bids by some bidders convince other bidders that the item is worth less than they originally thought the remarkable feature of the linkage principle i s that ex ante providing more information raises the expected revenues to the seller milgrom and weber 1982 have summarized the implications of the linkage principle succinctly honesty is the best policy

aggregation of information in large cournot markets consider a homogeneous product market where firms have private information about an uncertain demand parameter and compete in quantities we examine the convergence properties of bayesian cournot equilibria as the economy is replicated and conclude that large cournot or almost competitive markets do not aggregate information efficiently except possibly when the production technology exhibits constant returns to scale even in a competitive market there is a welfare loss with respect to the first best outcome due to incomplete information in general nevertheless a competitive market is efficient taking as given the decentralized private information structure of the economy endogenous and costly information acquisition is examined and seen to imply that the market outcome always falls short of the first best level with decreasing returns to scale the results are also shown to be robust to the addition of extra rounds of competition which allows firms to use the information revealed by past prices explicit closed form solutions yielding comparative static results are obtained for models characterized by quadratic payoffs and affine information structures

information revelation in auctions with common and private values we explore the incentives to reveal verifiable private information when there are both common and private components to agents valuations and when private information is held in both dimensions when agents observe only one signal they have no incentive to reveal the signal because such a revelation would negate their information advantage however when agents observe multiple signals they may be incentivized to reveal certain signals that could lower their opponents bids and thereby result in a higher profit from other signals this paper shows that there exists an equilibrium with revelation of common value signals in standard auctions which is an efficient equilibrium that maximizes the social welfare and could provide the seller with a higher profit than a situation with no information revelation

exploring the price dynamics of co2 emissions allowances in china s emissions trading scheme pilots establishing regional emissions trading scheme pilots in china is a newly transformative and explorative practice in this paper we examine the spot price dynamics asymmetric clustering and regime switching behaviors of co2 emissions allowances in the new china wide emissions trading scheme cets pilots using ar garch ar tarch and mrs ar garch models the regional ets pilots design in china vary widely in their coverage thresholds sector coverage emissions allocation and caps setting methods market trading rules and price stabilization provisions our empirical results indicate that the spot prices of regional emissions allowances exhibit significant dynamic behaviors asymmetric leverage effects and regime switching behaviors in the entire period considered previous market overreactions in the beijing tianjin and guangdong pilots have stronger price clustering effects on future conditional variances than do the shanghai and hubei pilots unexpected market shocks and greater persistence in the beijing tianjin and guangdong ets pilots display stronger market volatility and higher market risks and their asymmetric leverage effects display a decreasing trend in the volatility of the bea tjea and gdea prices the bea and shea prices exhibit significant regime switching behaviors price jumps and higher volatility in addition the changes in the regime switching phases are often related to the political mechanism design and the fundamental market factors those empirical results are beneficial for government decision makers and market participants to strengthen risk management strategies support emission related investment decisions and optimize co benefits of alternative energy environmental policies

auctions actions and the failure of information aggregation we study a market where k identical and indivisible objects are allocated using a uniform price auction where n k bidders each demand one object before the auction each bidder receives an informative but imperfect signal about the state of the world the good that is auctioned is a common value object for the bidders and a bidder s valuation for the object is determined jointly by the state of the world and an action that he chooses after winning the object but before he observes the state we show that there are equilibria where the auction price is completely uninformative about the state of the world and aggregates no information even in an arbitrarily large auction in the equilibrium that we construct because prices do not aggregate information agents have strict incentives to acquire costly information before they participate in the market also market statistics other than price such as the amount of rationing and bid distributions contain extra information about the state our findings sharply contrast with past work which shows that large auctions aggregate information when there is no ex post action

the relationship between regional natural gas markets and crude oil markets from a multi scale nonlinear granger causality perspective this study first decomposes the daily returns of regional gas and crude oil at different time scales using the ensemble empirical mode decomposition eemd method it then investigates the causality relationship between each pair of components at the different time scales by employing the linear and nonlinear granger causality tests for the original returns series this study finds that unidirectional linear granger causality exists from crude oil markets to north american and european gas markets however for nonlinear characteristics the crude oil and regional gas markets exhibit bidirectional nonlinear granger causality on the medium term time scale a bidirectional nonlinear spillover effect is found between the markets the long term trends for the markets suggest a significant linear relationship however no nonlinear spillover effect is found between the crude oil and regional gas markets

collusion and signaling in auctions with interdependent values abstract the standard approach to collusion in auctions posits an uninformed disinterested third party who prior to the auction designs and implements a collusive mechanism in environments where collusion agreements are likely to be both proposed and executed by the involved parties this approach may neglect information leakages from simply a proposal to collude we consider a model of collusion where one informed bidder proposes to another as in es and schummer 2004 we allow for general interdependent values and affiliated signals in contrast to third party modeling approaches collusion is inefficient from both a social perspective except for the case of pure common values and from the perspective of the ring both bidders are better off than without colluding but the surplus extracted from the seller is distributed asymmetrically between the bidders the potential for information leakage from proposing is bad for low types who reveal that they are weak competitors but is advantageous for high types because they are able to signal their strength we identify a so called briber s curse whereby acceptance of a proposal causes the proposer to downgrade her expected value for the object when there is additional competition in the form of bidders outside of the cartel the briber s curse significantly harms cartel profits and raises seller revenues

evaluating relative benefits of different types of r d for clean energy technologies clean energy technologies that cost more than fossil fuel technologies require support through research and development r d learning by doing relates historical cost decreases to accumulation of experience a learning investment is the amount of subsidy that is required to reach cost parity between a new technology and a conventional technology we use learning investments to compare the relative impacts of two stylized types of r d we define curve following r d to be r d that lowers costs by producing knowledge that would have otherwise been gained through learning by doing we define curve shifting r d to be r d that lowers costs by producing innovations that would not have occurred through learning by doing we show that if an equal investment in curve following or curve shifting r d would produce the same reduction in cost the curve shifting r d would be more effective at reducing the learning investment needed to make the technology competitive the relative benefit of curve shifting over curve following r d is greater with a high starting cost and low learning rate our analysis suggests that other things equal investments in curve shifting r d have large benefits relative to curve following r d in setting research policy governments should consider the greater benefits of cost reductions brought about by transformational rather than incremental change

fluctuations in the dollar a model of nominal and real exchange rate determination abstract this paper develops a model of exchange rate determination that extends the dornbusch frankel model to allow for large and sustained changes in real exchange rates real exchange rate changes are related to movements in the current account both through changes in expectations about the long run equilibrium real exchange rate and through changes in the risk premium the model is estimated empirically for the dollar s weighted average exchange rate over the flexible rate period of the 1970s the results indicate that innovations to the current account have been a significant determinant of the exchange rate predominantly through changes in expectations

coal nuclear and renewable energy policies in germany from the 1950s to the energiewende over the last 50 years german energy policy has ranged from strong enthusiasm for both coal and nuclear energy to deep skepticism the most dramatic changes with respect to energy policies have occurred as a response to nuclear accidents yet the accidental and unintended effects of coal policies are also important in influencing the trajectory the newly emerging climate debate prevented the coal industry from acting as a substitute for the diminishing share of nuclear power in 2011 the conservative government announced the energiewende energy transformation and decided to reduce the amount of fossil fuels from 80 of the energy supply to 20 by 2050 however while the verdict on nuclear was unequivocal with a final phase out date of 2022 the share of coal in the electricity market did not decrease and the amount of carbon dioxide released into the air slightly increased from 2011 to 2013 there are growing conflicts over the immediate costs and practicalities of coal replacement consequently the future of coal in germany is still relatively open and contested

efficiency in auctions with private and common values an experimental study this discussion has resulted in a publication in the american economic review 2002 92 3 625 43 auctions are generally not efficient when the object s expected value depends on private and common value information we report a series of first price auction experiments to measure the degree of inefficiency that occurs with financially motivated bidders while some subjects fall prey to the winner s curse they weigh their private and common value information in roughly the same manner as rational bidders with observed efficiencies close to predicted levels increased competition and reduced uncertainty about the common value positively affect revenues and efficiency the public release of information about the common value also raises efficiency although less than predicted

price quantity strategic market games this paper is yet another in a rapidly growing series e g 2 11 on strategic approaches to economic equilibrium our aim here is to make precise the remark implicitly due to bertrand 1 or 10 ch 4 5 that if the agents in an economy use price setting strategies then the strategic nash equilibria will in fact be walrasian and this without any assumption of a large number of small agents however in our models not only prices but also quantities are set by the agents thus it might actually be more appropriate to call them bertrand cournot types of models we begin with a standard walras exchange economy with a finite number of traders and commodities this is recast as a game in strategic form in essentially two different ways there is a trading post for each commodity to which traders send contingent statements about how much they wish to buy and sell and at what prices in model 1 the trading point is determined by the intersection of the aggregate supply and demand curves in model 2 trade takes place so as to meet as many contingent statements as possible each buyer whose orders are filled pays the price he quoted using a fiat money which can be borrowed costlessly and limitlessly but after trade is over there is a settlement of accounts and a penalty is levied on those who are bankrupt no attempt is made to model the penalty in any detail it is simply described in the form of a disutility but this in turn may be imagined to stem from confiscation of assets see remark 5 or the necessity of procuring highly priced loans etc call a noncooperative equilibrium active if it turns out that no trader is isolated i e trapped as the sole buyer or seller at some trading post then our results may be described as follows in model 1 the active2 n e of the game coincide with the c e of the market furthermore there is a subset of tight active n e which also coincide with the c e and each n e in this subset is strong

equilibrium price formation and the value of private information an economy is analyzed in which agents first choose whether to acquire costly information about the return to a risky asset and then choose demand functions that determine the allocation of assets it is a well known paradox that if agents are price takers and prices are fully revealing then an equilibrium with costly information acquisition does not exist it is shown that if the price formation process is modeled explicitly and agnets are not price takers then it is possible to have an equilibrium with fully revealing prices and costly information acquisition article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

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

assessing the development of china s new energy industry abstract as the world s largest carbon dioxide co 2 emitter china is facing increasing international pressure to reduce emissions actively developing new energy has become a fundamental means to solve the dilemma between environmental pollution and energy consumption growth thus more scholars have conducted a wide range of studies on the new energy industry however most of the existing studies use traditional linear models to investigate the relationships between new energy industry and its driving forces ignoring the objective reality that there are many nonlinear relationships in economic variables in order to overcome the shortcomings of existing research this paper uses a data driven nonparametric additive regression model to study the new energy industry the results show that the nonlinear effect of agricultural development shows an inverted u shaped pattern due to the changes in crop acreage at different stages of development the nonlinear impact of foreign energy dependence also indicates an inverted u shaped pattern however technological progress produces a positive u shaped nonlinear impact on the new energy industry because of the difference in r d funding and r d personnel investments similarly the impact of energy consumption structure also shows a positive u shaped pattern owing to the gradual decline in coal consumption therefore the government should develop differentiated policies at different stages in order to effectively promote the development of new energy industries

on the value of competition in procurement auctions it is commonly stated that ascending price or second price auctions allocate goods e ciently to those who value them most this implies that the more bidders at the auction stage the more e cient the nal allocation we review this statement when bidders have private information both on a private element and a common element while the nal allocation need not be ex post e cient we show that when bidders are ex ante symmetric more competition at the auction yields higher e ciency on expectation when bidders are ex ante asymmetric in particular with respect to the information on the common element the statement need no longer be true

revenue ranking of discriminatory and uniform auctions with an unknown number of bidders an important managerial question is the choice of the pricing rule we study whether this choice depends on the uncertainty about the number of participating bidders by comparing expected revenues under discriminatory and uniform pricing within an auction model with affiliated values stochastic number of bidders and linear bidding strategies we show that if uncertainty about the number of bidders is substantial then the discriminatory pricing generates higher expected revenues than the uniform pricing in particular the first price auction might generate higher revenues than the second price auction therefore uncertainty about the number of bidders is an important factor to consider when choosing the pricing rule we also study whether eliminating this uncertainty i e revealing the number of bidders is in the seller s interests and discuss the existence of an increasing symmetric equilibrium

an equilibrium analysis of information aggregation and fluctuations in markets with discrete decisions abstract this paper shows how the interaction between decentralized information gathering and discreteness of investment decisions at the individual level can generate random fluctuations in aggregate investment that involve occasionally large allocation errors this interaction is illustrated in a model in which private information is costly to acquire and prices reveal information the unique rational expectations equilibrium outcome of the model is shown to always be noisy and characterized by investment levels which may be high simply because uninformed investors are buying under the impression that the high price is a signal of good investment opportunities

on the market impact of wind energy forecasts this paper presents an analysis of how day ahead electricity spot prices are affected by day ahead wind power forecasts demonstration of this relationship is given as a test case for the western danish price area of the nord pool s elspot market impact on the average price behaviour is investigated as well as that on the distributional properties of the price by using a non parametric regression model to assess the effects of wind power forecasts on the average behaviour the non linearities and time variations in the relationship are captured well and the effects are shown to be quite substantial furthermore by evaluating the distributional properties of the spot prices under different scenarios the impact of the wind power forecasts on the price distribution is proved to be considerable the conditional price distribution is moreover shown to be non gaussian this implies that forecasting models for electricity spot prices for which parameters are estimated by a least squares techniques will not have gaussian residuals hence the widespread assumption of gaussian residuals from electricity spot price models is shown to be inadequate for these model types the revealed effects are likely to be observable and qualitatively similar in other day ahead electricity markets significantly penetrated by wind power

monotonicity and rationalizability in a large first price auction this paper proves that the monotonicity of bidding strategies together with the rationality of bidders implies that the winning bid in a first price auction converges to the competitive equilibrium price as the number of bidders increases wilson 1977 instead of analysing the symmetric nash equilibrium we examine rationalizable strategies bernheim 1984 pearce 1984 among the set of monotonic bidding strategies to prove that any monotonic rationalizable bidding strategy must be within a small neighbourhood of the truthful valuation of the object conditioned on the signal received by the bidder we obtain an information aggregation result similar to that of wilson 1977 while dispensing with almost all symmetric assumptions and using a milder solution concept than the nash equilibrium in particular if every bidder is ex ante identical then any rationalizable bidding strategy must be within a small neighbourhood of the symmetric nash equilibrium in a symmetric first price auction the symmetry of outcomes is implied rather than assumed copyright 2005 wiley blackwell

switching towards coal or renewable energy the effects of financial capital on energy transitions abstract does a country s stock of financial capital affect its ability to achieve energy transitions this paper uses data for up to 137 countries for the period 1998 2013 to investigate the importance of financial capital for changes in the use of each energy type i find that financial capital supports transition to more capital intensive energy types for high income countries financial capital facilitates transitions from fossil fuels to modern renewable energy sources especially wind both private credit from banks and domestic private debt securities support greater shares of wind energy for lower income countries financial capital supports progression from biomass towards fossil fuel energy sources such as coal i also find that countries with larger stocks of financial capital are more likely to move to more capital intensive electricity generation systems

lechatelier effects for the competitive firm under price uncertainty lechatelier effects confirm the intuition that constrained decisions are not only suboptimal but also restrained in the sense of being less elastic samuelson 1947 introduced this idea into economics and showed that it blends neatly with economic models of decision making under certainty being particularly well suited to the competitive firm as emphasized by silberberg 1971 linearity of the objective function combines with convexity in the constraint imposed by the production technology to yield envelope results at the first order and lechatelier effects at the second as powerful consequences of the maximization hypothesis the envelope results of primary interest in producer theory shephard s lemma for cost functions and hotelling s lemma for profit functions are equality relations reflecting the firstorder stationarity of an optimum lechatelier effects in contrast are inequality relations reflecting the restrained nature of short run responses compared with long run less constrained responses thus the quantities of labor demanded and output supplied are more elastic with respect to wage rate and output price changes in the long run than in the short run these lechatelier predictions pertain to a firm that has fully adjusted to an exogenous set of factor and output prices and thus apply only in the neighborhood of a long run equilibrium configuration for the firm however they apply equally well whether capital and labor are substitute or complementary factors of production milgrom and roberts 1996 have established a global lechatelier principle under the assumption that capital and labor are always substitutes or always complements in production a stipulation that is necessarily true for the infinitesimal changes contemplated in the local lechatelier predictions when the firm makes decisions while facing uncertainty about output price risk preferences influence behavior if the uncertainty cannot be fully diversified through futures contracts or the sale of ownership shares as in the case of closely held family businesses such as some of those

renewable energy output co2 emissions and fossil fuel prices in central america evidence from a nonlinear panel smooth transition vector error correction model abstract this study examines the determinants of renewable energy consumption per capita for a panel of seven central american countries over the period 1980 to 2010 specifically we find that a long run cointegrated relationship exists between renewable energy consumption per capita real gdp per capita carbon emissions per capita real coal prices and real oil prices with the respective coefficients positive and statistically significant a structural break in the cointegrating relationship appears in 2002 which coincides with the establishment of the energy and environment partnership with central america initiative to expand the use of renewable energy sources recognizing the regime shift in 2002 we estimate a nonlinear panel smooth transition vector error correction model to show that for the post 2002 period the influence of renewable energy consumption per capita upon real coal and oil prices strengthened relative to the pre 2002 period as well as a greater sensitivity of real gdp per capita to carbon emissions per capita

rational expectations information acquisition and competitive bidding most rational expectations market equilibrium models are not models of price formation and naive mechanisms leading to such equilibria can be severely manipulable in this paper a bidding model is developed which has the market like features that bidders act as price takers and that prices convey information higher equilibrium prices convey more favorable information about the quality of the objects being sold than do lower prices bidders can benefit from trading only if they have a transactions motive or if they have access to inside information apart from exceptional cases prices are not fully revealing a two stage model is developed in which bidders may acquire information at a cost before bidding and for which the equilibrium price is fully revealing resolving a well known paradox

internet auctions with many traders abstract we study a multi unit auction environment similar to ebay sellers each with a single unit of a homogeneous good set reserve prices at their own second price auctions each buyer has private value for the good and wishes to acquire a single unit buyers can bid as often as they like and move between auctions we characterize a perfect bayesian equilibrium for this decentralized dynamic mechanism in which conditional on reserve prices an efficient set of trades occurs at a uniform price in a large but finite market the sellers set reserve prices equal to their true costs under a very mild distributional assumption so ex post efficiency is achieved buyers strategies in this equilibrium are simple and do not depend on their beliefs about other buyers valuations or the number of buyers and sellers

on the asymptotic distribution of the transaction price in a clock model of a multi unit oral ascending price auction within the common value paradigm using a clock model of a multi unit oral ascending price auction within the common value paradigm we analyze the behavior of the transaction price as the numbers of bidders and units gets large in a particular way we find that even though the transaction price is determined by a fraction of losing drop out bids that price converges in probability to the true but ex ante unknown value subsequently we demonstrate that the asymptotic distribution of the transaction price is gaussian finally we apply our methods to data from an auction of taxi license plates held in shenzhen china

carbon dioxide income and energy evidence from a non linear model abstract this study applies the panel smooth transition regression pstr model to explore the impacts of real income energy and investment on the co 2 income nexus for 99 countries covering the period from 1971 to 2010 we find that in the full sample as real income rises co 2 emissions rapidly increase first and then their increasing rate starts to slow down while the environmental kuznets curve ekc hypothesis for co 2 emissions is supported from the composite results of three income groups our results show that decreasing energy usage improving energy efficiency and enhancing clean energy usage could effectively ease the impacts of real income on co 2 emissions moreover countries with different energy trade conditions and income levels have different co 2 income correlations indicating that one size does not fit all

efficient investments in the implementation problem abstract this paper identifies a condition for an efficient social choice rule to be fully implementable when we take into account investment efficiency to do so we extend the standard implementation problem to include endogenous ex ante and ex post investments in our problem the social planner aims to achieve efficiency in every equilibrium of a dynamic game in which agents strategically make investments before and after playing the mechanism our main theorem shows that a novel condition commitment proofness is sufficient and necessary for an efficient social choice rule to be implementable in subgame perfect equilibria the availability of ex post investments is crucial in our model there is no social choice rule that is efficient and implementable in subgame perfect equilibria without ex post investments we also show that our positive result continues to hold in the incomplete information setting

endogenous private information structures we formally incorporate the option to gather information into a game and thus endogenize the information structure we ask whether models with exogenous information structures are robust with respect to this endogenization any nash equilibrium of the game with information acquisition induces a nash equilibrium in the corresponding game with an exogenous structure we provide sufficient conditions on the structure of the game for which this remains true when nash is replaced by sequential we characterize the sequential nash equilibria of games with exogenous information structures that can arise as a sequential nash equilibrium of games with endogenous information acquisition

the impact of government subsidies and enterprises r d investment a panel data study from renewable energy in china in this research we aim to understand the influence of government subsidies on enterprises research and development r d investment behavior particularly in china s renewable energy sector we are also interested in examining how the attributes of enterprise ownership act as a moderating variable for the relationship between government subsidies and r d investment behavior three classical panel data analysis models including the pooled ordinary least squares ols model the fixed effect model and the random effect model are employed we find that government subsidies have a significant crowding out influence on enterprises r d investment behavior and that the influence is further moderated by the attributes of enterprise ownership moreover a panel threshold regression model is used to demonstrate how the influence of government subsidies on enterprises r d investment behavior will change when government subsidies increase two thresholds 0 6 and 10 1 are identified we recommend that relevant government departments should motivate enterprise r d investment behavioral intention by increasing subsidies within a certain range different attributes of enterprise ownership should also be considered as part of policy reform and re structuring relating to government subsidies

local discouragement and global collapse a theory of coordination avalanches abstract we study a dynamic game in which all players initially possess the same information and coordinate on a high level of activity eventually players with a long string of bad experiences become inactive this prospect can cause a coordination avalanche in which all activity in the population stops coordination avalanches are part of pareto efficient equilibria they can occur at any point in the game their occurrence does not depend on the true state of nature and allowing players to exchange information may merely hasten their onset we present applications to search markets organizational meltdown and inefficient computer upgrades jel d83

wavelet based test of co movement and causality between oil and renewable energy stock prices abstract we studied co movement and causality between oil and renewable energy stock prices using continuous and discrete wavelets firstly to obtain information on dynamic correlations over time and for different time scales from wavelet coherence and secondly to obtain information on linear and non linear granger causality in the time frequency domain for general and sectoral renewable energy indices for the period 2006 2015 our findings indicate that dependence between oil and renewable energy returns in the short run was weak but gradually strengthened towards the long run mainly for the period 2008 2012 our causality tests provide evidence against linear causality at higher frequencies and in favour of unidirectional and bidirectional linear causality at lower frequencies in contrast we found consistent evidence of non linear causality running from renewable energy indices to oil prices at different time horizons and mixed evidence of causality running from oil to renewable energy prices these results have potential implications for investors in terms of hedging and for policymakers in terms of policy support decisions regarding the development of renewable energy

auction cartels and the absence of efficient communication abstract this paper examines the feasibility of collusive mechanisms in single unit auctions a model is constructed with private and common value information asymmetry and continuous type space we show that an incentive compatible bid coordination mechanism bcm does not exist if common value uncertainty is present this result contradicts actual antitrust cases where common effects or resale opportunities created uncertainty about valuations but a price fixing cartel was formed we solve the puzzle by relaxing the assumption that all bidder types truthfully reveal their private information the introduced bayesian bid coordination mechanism bbcm exists if the main source of information asymmetry is private value in that case a designated ring member can signal high valuation and suppress competition our results demonstrate the rationale behind cartel mechanisms with pre auction knockouts

information acquisition in interdependent value auctions we consider an auction environment with interdependent values each bidder can learn her payoff type through costly information acquisition we contrast the socially optimal decision to acquire information with the equilibrium solution in which each agent has to privately bear the cost of information acquisition in the context of the generalized vickrey clarke groves mechanism we establish that the equilibrium level exceeds the socially optimal level of information with positive interdependence the individual decisions to acquire information are strategic substitutes the difference between the equilibrium and the efficient level of information acquisition is increasing in the interdependence of the bidders valuations and decreasing in the number of informed bidders jel c72 c73 d43 d83

learning and price discovery in a search market we introduce learning into an otherwise standard two sided search and bargaining market there is uncertainty about the price distribution due to uncertainty about an underlying exogenous state of relative demand in the high state buyers are on the long side otherwise they are on the short side in equilibrium prices are on average higher in the high state individual agents learn about the distribution while searching agents typically start out by experimenting with a tough bargaining position buyers may initially insist on a low price and sellers on a high price after successive failures to trade agents become increasingly pessimistic about the market conditions and soften their bargaining stance when frictions are small equilibrium transaction prices are approximately market clearing despite aggregate demand being unknown thus the search and bargaining procedure enables price discovery in a decentralized market

who should be responsible for software security a comparative analysis of liability policies in network environments in recent years vendor liability for software security vulnerabilities has been the center of an important debate in the software community and a topic gaining government attention in legislative committees and hearings the importance of this question surrounding vendor security liability is amplified when one considers the increasing emergence of zero day attacks where hackers take advantage of vulnerabilities before the software vendor has a chance to release protective patches in this paper we compare the effectiveness of three software liability policies vendor liability for damages vendor liability for patching costs and government imposed security standards we find that vendor liability for losses is not effective in improving social welfare in the short run while liability for patching costs can be effective if either patching costs are large and the likelihood of a zero day attack is low or patching costs are small and zero day likelihood is high in the long run when the vendor can invest in reducing the likelihood of security vulnerabilities loss liability is still ineffective when the zero day attack probability is high but can increase both vendor investment in security and social welfare when zero day attack likelihood is sufficiently low when the zero day attack probability is high patch liability is ineffective if user patching costs are large but partial patch liability can boost vendor investment and improve welfare when patching costs are small in contrast in an environment with low zero day attack probability full vendor patch liability can be optimal finally comparing the effectiveness of the three liability policies under study we find that government imposed standards on software security investment can be preferable to both patching and loss liability on the vendor if zero day attack likelihood is sufficiently low however if zero day attacks are a common occurrence and patching costs are not too high partial patch liability is the most effective policy this paper was accepted by sandra slaughter information systems

is there a cost channel of monetary policy transmission an investigation into the pricing behavior of 2 000 firms the paper exploits a unique panel covering some 2 000 italian manufacturing firms and 14 years of data on individual prices and individual interest rates paid on several types of debt to address the question of the existence of a channel of transmission of monetary policy operating through the effect of interest expenses on the marginal cost of production it has been argued that this mechanism may explain the dimension of the real effects of monetary policy give a rationale for the positive short run response of prices to interest rate increases the price puzzle and call for a more gradual monetary policy response to shocks we find robust evidence in favor of the presence of a cost channel of monetary policy transmission proportional to the amount of working capital held by each firm the channel is large enough to have non trivial monetary policy implications

the 1000 gtc coal question are cases of vastly expanded future coal combustion still plausible abstract decades ago prospects seemed strong for significantly expanded global coal consumption studies of energy futures depicted the full geologic extent of coal as a virtually unlimited backstop energy supply drawing justification from legacy ratios of reserves to production r p on the order of several centuries annual consumption and market prices for hard coal have doubled since 1990 providing an opportunity to recalibrate the next century s reference case with an empirically constrained outlook for this important industrial fuel source over the last two decades improving knowledge of world coal deposits refined estimates of their recoverable portion reducing assessed reserves by two thirds coal supply costs during this period increased much faster than anticipated by models which mapped total geologic occurrences with long and flat supply curves consequently underlying assumptions no longer hold for many multi decade global energy reference cases depicting a rapid expansion of coal production the conceptual framework for these scenarios needs revision energy system outlooks underlying pathways of future greenhouse gas ghg emissions provide a case study since the climate change research community commonly uses business as usual scenarios with a strong carbon signal from coal combustion many times higher than current reserve estimates in this paper we explain why vast expansion in 21st century coal consumption should not be used to describe any plausible reference case of the global energy future illustrating coal as a practically unlimited backstop supply is inconsistent with the current state of coal markets technology and reserve estimates future coal production faces many uncertainties but the key uncertainty for long term scenarios is the recoverable portion of reserves not how many total geologic resources will eventually become reserves

an investigation of renewable and non renewable energy consumption and economic growth nexus using industrial and residential energy consumption abstract our study shows that links between economic growth and energy consumption both expressed in per capita terms differed for renewables and non renewables for income panels over the period 1971 to 2011 renewables are mainly found to support the neutrality hypothesis only renewable totals in low and lower middle income llmi countries are found to drive economic growth the feedback growth and conservative hypotheses strongly feature with non renewables total and industrial our results are derived by linking different definitions of energy consumption with economic growth for 89 countries divided into llmi upper middle income umi and high income hi panels

exchange rates and fundamental variables a semi parametric analysis of binary choice this study is motivated by the dearth of models that provide good out of sample fit for exchange rates that is current models of exchange rate behaviour are poor predictors of subsequent currency movements an attempt is made to determine if the relationship between exchange rates and fundamental variables can help explain the more extreme exchange rate movements distributional switches models are developed that relate fundamental economic variables to the resulting estimates based on the mixture of normal probability distributions parametric estimation procedures logit and probit are compared with a semi parametric technique maximum score estimation mscore which is relatively untested in the field of finance the fundamental variables of these models include information on trade balances money supply changes interest rate changes real economic growth relative inflation rates and changes in stock market indexes classification results favour mscore implications of results and improvements

how to promote the growth of new energy industry at different stages abstract china is currently the world s largest emitter of carbon dioxide co2 vigorously developing new energy sources has become an important way to reduce co2 emissions therefore more and more scholars have studied effective ways to promote the development of new energy industry however most of the existing research use single equation linear models or static models to study the driving forces of the new energy industry this not only ignores the large number of dynamic relationships between economic variables but also produces endogeneity problems in order to overcome the shortcomings of existing research this paper uses vector autoregressive model to study the new energy industry the results show that energy consumption structure has a positive effect on the new energy industry in the short run but the effect is limited in the long run the impact of the agriculture industry is gradually narrowing over time due to the gradual reduction of crop acreage however the influence of economic growth is positive both in the short and long run this is due to the gradual optimization of industrial structure technological progress produces a similar impact owing to continued investment in research and development funding as well as research and development personnel

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

efficiency of experimental security markets with insider information an application of rational expectations models the study reports on the ability of competing models of market information integration and dissemination to explain the behavior of simple laboratory markets for a one priced security returns to the security depended upon a randomly drawn state of nature some agents insiders whose identity was unknown to other agents knew the state before the markets opened with replication of market conditions the predictions of a fully revealing rational expectations model are relatively accurate prices adjusted immediately to near rational expectations prices profits of insiders were virtually indistinguishable from non insiders and efficiency levels converged to near 100 percent

increasing competition and the winner s curse evidence from procurement we assess empirically the effects of the winner s curse which in common value auctions counsels more conservative bidding as the number of competitors increases first we construct an econometric model of an auction in which bidders preferences have both common and private value components and propose a new monotone quantile approach which facilitates estimation of this model second we estimate the model using bids from procurement auctions held by the state of new jersey for a large subset of these auctions we find that median procurement costs rise as competition intensifies in this setting then asymmetric information overturns the common economic wisdom that more competition is always desirable

prices versus policy an analysis of the drivers of the primary fossil fuel mix abstract energy policymakers often attempt to shape their countries energy mix rather than leave it purely to market forces by calibrating and simulating a dynamic stochastic general equilibrium dsge model this paper analyzes the primary fossil fuel mix in the usa and compares it to germany and the uk given the different evolution of the mixes and the different roles played by relative prices and policy in north america and europe it is found that the model explains well the evolution of the primary fossil fuel mix in the usa for the period 1980 2014 suggesting that relative fossil fuel prices generally dominated in determining the mix during this time however this is not the case for germany and the uk for both countries the model performs well only for the period after the market oriented reforms in the 1990s additionally the volatility of private consumption and output for the pre and post reform periods is evaluated for germany and the uk and it is found that the liberalized energy markets brought about a transition from coal to natural gas but with increased macroeconomic volatility

informational size and efficient auctions we develop an auction model for the case of interdependent values and multidimensional signals in which agents signals are correlated we provide conditions under which a modification of the vickrey auction which includes payments to the bidders will result in an ex post efficient outcome furthermore we provide a definition of informational size such that the necessary payments to bidders will be arbitrarily small if agents are sufficiently informationally small the efficiency of market processes has been a central concern in economics since its inception auction mechanisms constitute a very important class of market processes yet the analysis of auctions has typically focused on their revenue generating properties rather than their efficiency properties this is partly due to the fact that for many of the problems typically studied efficiency is trivial when bidders have private values a standard vickrey auction guarantees that the object will be sold to the buyer with the highest value for the object in the case of pure common values that is when all buyers have the same value for the object any outcome that with probability one assigns the object to some bidder will be efficient the intermediate case in which bidders values are not identical but may depend on other bidders signals is more problematic when bidders values are interdependent in this way any single bidder s value may depend on the information of other agents and hence he may not even know his own value it is not clear what it would mean for an agent to bid his true value even before we ask if it is optimal for him to do so several papers have studied efficient auctions with interdependent values and independent types 1 while this is a natural place to begin the independence assumption is not compelling for many problems a prototypical problem is one in which an object is to be sold and individual bidders have private information about the object say the quantity or quality of oil in a tract to be sold that affects other agents values for the object when bidders types include information about objective characteristics of the object being sold their types will typically not be independent when agents types are statistically dependent we show that there exist efficient auction mechanisms for interdependent value auction problems that are essentially vickrey auctions augmented by payments to not from the agents most importantly we link the

information and strategic behavior abstract does encouraging trader participation enhance market competitiveness this paper shows that when trader preferences are interdependent trader market power does not necessarily decrease with greater participation and traders need not become price takers in large markets thus larger markets can be less liquid and associated with lower ex ante welfare in the linear normal model the necessary and sufficient condition on the information structure is provided under which price impact is monotone in market size a condition is given when the rational expectations equilibrium which is typically not fully revealing within the considered class of preference interdependencies is obtained in large markets

bargaining with endogenous information two ex ante identically informed agents play a double auction over the division of a trading surplus with endogenous information and common values this paper shows that if information acquisition is not observable three types of inefficiencies can arise if the information cost is in an intermediate range no pure strategy equilibrium with trade exists although the agents maintain symmetric information if the information cost is low any trading equilibrium exhibits costly information acquisition if the agents face asymmetric information cost the akerlof s lemons problem arises as a self fulfilling equilibrium and only partial trade occurs

monotone equilibrium in multi unit auctions in two sided multi unit auctions having a variety of payment rules including uniform price and discriminatory auctions a monotone pure strategy equilibrium mpse exists when bidders are risk neutral with independent multi dimensional types and interdependent values in fact all mixed strategy equilibria are ex post allocation and interim expected payment equivalent to mpse thus for standard expected surplus revenue analysis there is no loss restricting attention to monotone strategies