effect of information feedback on bidder behavior in continuous combinatorial auctions combinatorial auctions in which bidders can bid on combinations of goods can increase the economic efficiency of a trade when goods have complementarities recent theoretical developments have lessened the computational complexity of these auctions but the issue of cognitive complexity remains an unexplored barrier for the online marketplace this study uses a data driven approach to explore how bidders react to the complexity in such auctions using three experimental feedback treatments using cluster analyses of the bids and the clicks generated by bidders we find three stable bidder strategies across the three treatments further these strategies are robust for separate experiments using a different setup we also benchmark the continuous auctions against an iterative form of combinatorial auction the combinatorial clock auction the enumeration of the bidding strategies across different types of feedback along with the analysis of their economic implications is offered to help practitioners design better combinatorial auction environments this paper was accepted by lorin hitt information systems

secondary capital markets long run growth and the term structure of asset yields an endogenous growth model is presented in which production uses a vector of capital inputs technologies for creating capital of different types vary by gestation period and productivity ownership of gestating capital must be rolled over in secondary capital markets in which transactions are costly we study how reductions in transactions costs affect the equilibrium growth rate the rate of return on saving the volume of activity in secondary capital markets and the term structure of asset yields we give conditions under which reductions in transactions costs result in higher or lower growth rates

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

the tragedy of the commons and economic growth why does capital flow from poor to rich countries we analyze a differential game in which all interest groups have access to a common capital stock we show that the introduction of a technology that has inferior productivity but enjoys private access may ameliorate the tragedy of the commons we use this model to analyze capital flight in many poor countries property rights are not well defined since safe bank accounts in rich countries the inferior technology are available to citizens of these countries they engage in capital flight we show that the occurrence of capital flight does not imply that opening the capital account reduces growth and welfare

auctions with a stochastic number of bidders abstract auction theory is generalized by allowing the number of bidders to be stochastic in a first price sealed bid auction with bidders having constant absolute risk aversion the expected selling price is higher when the bidders do not know how many other bidders there are than when they do know this thus the seller should conceal the number of bidders if he can moreover a bidder s ex ante expected utility is the same whether or not there is a policy of concealing the number of bidders concealment therefore pareto dominates announcement with risk neutral bidders the optimal auction is the same whether or not the bidders know who their competitors are

long run competition in capacity short run competition in price and the cournot model in this article we investigate the nature of equilibrium in markets in which firms choose the scale of operation before they make pricing decisions we analyze a duopoly model in which firms choose their capacities before engaging in bertrand like price competition we demonstrate that the cournot outcome is unlikely to emerge in such markets and that the equilibrium tends to be more competitive than the cournot model would predict in addition our results indicate a tendency toward asymmetric firm sizes and price dispersion that results from the mixed strategies firms use in equilibrium

a note on sequential auctions this note provides an explanation for the declining price anomaly in sequential second price auctions we illustrate how the average winning bids of risk neutral agents bidding for objects with valuations drawn from independent identical distributions are lower in later auctions than in earlier auctions when the objects are not identical we determine the optimal order in which they should be auctioned

auctioning incentive contracts this paper draws a remarkably simple bridge between auction theory and incentive theory it considers the auctioning of an indivisible project among several fi rms the firms have private information about their future cost at th e bidding stage and the selected firm ex post invests in cost reduct ion the authors show that 1 the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid 2 the winner faces a linear incenti ve contract 3 the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost and 4 the share of cost overruns borne by the winn er decreases with the winner s announced expected cost copyright 1987 by university of chicago press

does voluntary participation undermine the coase theorem abstract the coase theorem states that costless enforcement of voluntary agreements yields efficient outcomes we argue that previous treatments fail to recognize the full meaning of voluntary it requires a two stage game a non cooperative participation decision followed by coaseian bargaining only among those who choose to participate we illustrate this in a simple public goods model and find outcomes ranging from extremely inefficient to fully efficient however the efficient equilibrium is not robust to even very small transaction costs thus we cast doubt on coaseian claims of universal efficiency finally we outline a kind of coercion that restores efficiency

expected revenue from open and sealed bid auctions in his preceding piece paul milgrom has neatly laid out many of the core results of the recent literature on the theory of competitive bidding my immediate goal here is to provide the simplest possible derivation of three basic revenue ranking theorems each of these compares the expected revenue obtained from open bidding as in the typical art auction with the expected revenue obtained when bids are sealed and the winner pays his bid the first of the ranking theorems is the revenue equivalence theorem which establishes conditions under which these two seemingly very different auctions generate the same expected revenue for the seller the other two theorems establish the effect of relaxing one of the key assumptions when buyers are risk averse the seller gains if buyers submit sealed bids and the winner pays his bid on the other hand if valuations of different buyers are positively correlated rather than unrelated the seller extracts more revenue in an open ascending bid auction in reducing these theorems to their basic elements my deeper goal is to provide the reader with a better intuitive understanding of the results

anti williamson a marxian critique of new institutional economics new institutional economics explains capitalist institutions by means of neoclassical tools this method consists of introducing non market institutions as solutions to market failures the explicit or implicit assumption is that in the beginning there were markets in this paper we criticise this conception inherited from neoclassical economics by focusing on williamson s theory first we discuss williamson s speculative method which idealises the market and presents it as natural and universal we then suggest that williamson s categories his method and conception are themselves products of bourgeois ideology in this sense we conclude williamson himself is ultimately an institution of capitalism

the declining price anomaly abstract data from wine auctions indicate that identical products sold sequentially typically follow a decreasing pattern of prices known as the declining price anomaly this is explained for both first and second price auctions by appealing to risk averse bidders earlier bids are then equal to expected later prices plus a risk premium associated with the risky future price we show that this logic rests on the assumption of nondecreasing absolute risk aversion which is necessary for pure strategy equilibrium bidding functions to exist thus decreasing absolute risk aversion implies ex post inefficiency with positive probability data from wine auctions are used to confirm the existence of the declining price anomaly journal of economic literature classification numbers d43 d44 d81 d82 l81

auctions an introduction abstract this is a detailed introduction to auction theory it begins with a simple analysis of standard auctions and then uses a strikingly simple general solution of symmetric private values auctions to prove the payoff equivalence of many auction rules the basic framework is then modified to admit risk aversion multi unit and repeated auctions as well as collusion then follows an introduction to optimal auctions with and without stochastic entry and to common value auctions and the winner s curse problem the survey closes with a sample of applications from the regulation of natural monopolies to price competition in oligopoly and the government securities market

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

public choice and the economic analysis of anarchy a survey public choice economists began studying anarchy in the 1970s since then the amount of research on anarchy has burgeoned this article surveys the important public choice contributions to the economics of anarchy following early public choice economists many economists are researching how individuals interact without government from non public interested explanations of the creation of government to historical studies of internalizing externalities under anarchy public choice scholars are arriving at a more realistic perspective of human interaction with and without government although the economics of politics receives more attention the economics of anarchy is an important area of research in public choice

introduction a symposium on the predatory state economists have adopted two broad perspectives on the state contractual i e provider of public goods and services and predatory coercive and extractive by a predatory state we mean a state that promotes the private interests of dominant groups within the state such as politicians the army and bureaucrats or influential private groups with strong lobbying powers neo institutional economists support an extended version of the contractual perspective in which the state is not simply a benevolent dictator but may itself be composed of predators however it considers predation as only a means to promote protection by contrast a predatory vision of the state argues that while protection and predation are two faces of the same coin a predatory state protects only to promote its predation on the private sector this symposium explores how a predatory approach to the state can shed light on all types of state from liberal democratic to authoritarian and failed ones both in the past and present

5 information impact and allocation rules in auctions with affiliated private values a laboratory study in affiliated private value auctions each bidder has perfect information regarding his her own value for the object at auction but higher values of the item for one bidder make higher values for other bidders more likely we report on a series of experiments examining three key implications of these auctions i in a first price auction public information about rivals values increases expected revenue ii an english auction increases expected revenue compared to a first price auction and iii a second price auction is isomorphic to an english auction in examining these issues we compare predictions of some ad hoc bidding models with nash equilibrium predictions in the first price auction experiments nash equilibrium bidding theory organizes the data better than either of two ad hoc bidding models public information about others valuations does increase average revenue but the increase in revenue is smaller and less reliable than predicted under risk neutral nash equilibrium bidding lower average revenue might be attributed to risk aversion while the high variability is attributed to a sizable frequency of individual bidding errors relative to the theory bidding theory precisely organizes english auction outcomes after a brief initial learning period the dominant strategy equilibrium does not organize second price auctions nearly as well as market prices persistently exceed predicted prices the difference between english and second price outcomes is attributed to effects of different information flows inherent in the structure of the two institutions on eliminating bidding errors revenue impacts of these two institutions relative to a first price auction are examined in light of observed bidding patterns

fair payments for efficient allocations in public sector combinatorial auctions motivated by the increasing use of auctions by government agencies we consider the problem of fairly pricing public goods in a combinatorial auction a well known problem with the incentive compatible vickrey clarke groves vcg auction mechanism is that the resulting prices may not be in the core loosely speaking this means the payments of the winners could be so low that there are bidders who would have been willing to pay more than the payments of the winning bidders clearly this unfair outcome is unacceptable for a public sector auction recent advances in auction theory suggest that combinatorial auctions resulting in efficient outcomes and bidder pareto optimal core payments offer a viable practical alternative to address this problem this paper confronts two critical issues facing the bidder pareto optimal core payment first motivated to minimize a bidder s ability to benefit through strategic manipulation through collusive agreement or unilateral action we demonstrate the strength of a mechanism that minimizes total payments among all such auction outcomes narrowing the previously broad solution concept second we address the computational difficulties of achieving these outcomes with a constraint generation approach promising to broaden the range of applications for which bidder pareto optimal core pricing achieves a comfortably rapid solution

the expected stop out price in a discriminating auction abstract optimal bidding strategies and expected seller revenues in price discriminating auctions have been derived in previous studies we extend this research by characterizing the behavior of the expected stop out price for such auctions

banks as secret keepers banks are optimally opaque institutions they produce debt for use as a transaction medium bank money which requires that information about the backing assets loans not be revealed so that bank money does not fluctuate in value reducing the efficiency of trade this need for opacity conflicts with the production of information about investment projects needed for allocative efficiency intermediaries exist to hide such information so banks select portfolios of information insensitive assets for the economy as a whole firms endogenously separate into bank finance and capital market stock market finance depending on the cost of producing information about their projects

anarchy and autarky endogenous predation as a barrier to trade this article presents a general equilibrium two country ricardian trade model with endogenous transactions costs that arise from individual utility maximizing allocation of labor to production and piracy in the absence of institutions for risk sharing and coordination of defense autarky obtains over most of the parameter space when both trade and predation are supported in equilibrium terms of trade effects can make security immiserizing in that case paradoxically predation creates trade

financial liberalisation stockmarkets and economic development abstract during the 1980s and 1990s many developing countries dcs have been engaged in far reaching reforms of their financial systems liberalising them and making them more market oriented this liberalisation involving inter alia financial de repression has been inspired partly by the work of the mckinnon 1973 and shaw 1973 m s school this paper suggests that in addition to financial de repression there has been a major new element in the development of dc financial systems in recent years the establishment and fast expansion of stockmarkets these markets have played a key role in the internal as well as external financial liberalisation processes in leading dcs further the paper finds that the actual behaviour of these markets in many countries has led to outcomes which undermine the effects of the higher real interest rates arising from financial de repression

the voracity effect abstract we analyze an economy that lacks a strong legal political institutional infrastructure and is populated by multiple powerful groups powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock in equilibrium this leads to slow economic growth and a voracity effect by which a shock such as a terms of trade windfall perversely generates a more than proportionate increase in fiscal redistribution and reduces growth we also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks jel f43 o10 o23 o40

the package assignment model we study assignment problems where individuals trade packages consisting of several rather than single objects although buyers reservations values are non additive efficient assignments can be formulated as a linear programming problem in which the pricing functions expressing duality may be non linear in the objects constituting the packages the interconnections among the linear programming formulation walrasian equilibrium and the core are established in the single seller auction version a necessary and sufficient condition is given for the vickrey payoff point to be implementable by a pricing equilibrium journal of economic literature classification numbers c62 d44 d51

finance and development rethinking the role of financial transparency abstract over the last decade many developing countries strengthened their transparency standards with the objective of improving asset market allocations and macroeconomic outcomes this paper develops a general equilibrium model and argues that in a financially underdeveloped economy with uninsurable consumption risk and stochastic investment enforcing financial transparency might be counterproductive the framework builds upon a standard property that illiquid asset markets cause under investment in assets that pay in the long run because individually rational agents hoard cash to exploit sales of underpriced long term assets first i show that in this environment private revelation of news about investment returns could give a chance to sell low quality assets and then characterize the conditions under which the lack of financial transparency reduces under investment and improves macroeconomic development an empirical analysis reveals that the theoretical predictions of the model is in line with cross country data

two bandits or more the case of viking age england the olsonian distinction between roving and stationary bandits outlines the rationale behind the transition from anarchy to the emergence of the predatory state this two bandit model may however be expanded to include more bandit types in the case of viking age england local english kings were unable to monopolize violence and defend their realms against competing viking raiders as the vikings time horizon grew so did the accumulated value of more formal taxation and bandit types evolved in four steps the first step is the olsonian roving bandit who executed viking hit and run attacks and plunders during the second half of the tenth century the second step is the gafol bandit gafol is payment for leaving paid to among others swein forkbeard the third step is the heregeld bandit heregeld is a tax to support an army for hire most notably thorkell the tall s the fourth step is the olsonian stationary bandit i e the strongest military leader among the vikings cnut the great settled down as the new king overall the olsonian two bandit model can be expanded to a four bandit staircase model in which the new gafol and heregeld bandit types explain the steps from anarchy and short run raiding to long run formal taxation in a predatory state

appropriation violent enforcement and transaction costs a critical survey this paper focuses on the extension of transaction costs to appropriative activity and coercive power in the property rights approach it has been argued that including the costs of appropriation and violent enforcement in transaction costs is based on the assumption that coaseian bargaining can be extended to any institutional scenario i e voluntary as well as coercive exchange however voluntary transactions cannot capture the logic of coercive power this means that the assumption of an efficient political market is not valid and that the political coase theorem lacks the logical consistency to provide a cornerstone for political theory

2 the institutional structure of production 1 prize lecture to the memory of alfred nobel december 9 1991 this abstract was borrowed from another version of this item

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

the rise and decline of nations economic growth stagflation and social rigidities the years since world war ii have seen rapid shifts in the relative positions of different countries and regions leading political economist mancur olson offers a new and compelling theory to explain these shifts in fortune and then tests his theory against evidence from many periods of history and many parts of the world

the structure of a contract and the theory of a non exclusive resource the process of arriving at a useful concept of analysis is not only slow and painful but also may go astray and attain nothing useful someone begins with one example or observation followed by a theory which is intuitively plausible a theoretical term associated with a vague concept is coined examples of a seemingly different type emerge which call for another theory the process goes on as examples and theories continue to accumulate the different categories under the same heading of analysis serve only to confuse and each associated theory becomes ad hoc such has been the fate of the concept of externality a more useful approach i think is via contractual conditions the example chosen for illustration is marine fisheries where the fishing right is taken

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

entry and r d in procurement contracting abstract a model of competitive procurement and contracting is presented in this paper the key features of the model include precontract r d an endogenous number of homogeneous firms and sealed bid auction rules both diminishing and constant returns to scale drs and crs in r d expenditure technologies are considered i find that the sealed bid first price auction fpa is equivalent to the second price auction spa under drs technology the revenue equivalence theorems breaks down under crs because multiple equilibria arise in the r d stage when spa is used howerer spa yields a unique perfect equilibrium given sufficient heterogeneity among potential firms the free entry perfect equilibrium is also characterized the buyer prefers free entry through an appropriate selection of the reservation price

law or economics w hen aaron director and edward levi launched the journal of law and economics in 1958 director suggested the title law or economics this alternative title certainly described the world more accurately at that time the traditional attitude of each discipline toward the other had been one of indifference only gradually has that attitude been replaced by a mixture of cooperation and hostility the first systematic application in america of economics to law was the use of price theory to explain economic phenomena involved in the antitrust cases director made creative use of price theory to explain phenomena such as tie in sales and patent licensing and assisted younger colleagues such as john mcgee and lester telser in their respective studies of predatory competition and resale price maintenance in such applications professional economic analysis was replacing the amateur economics of the lawyer lawyers did not welcome this development the national committee for the study of the antitrust laws was the scene of a deep schism between the fifty three lawyers and the eight economists 2 these numbers probably represented the belief that 13 percent of antitrust policy is economics the remainder law at one point the lawyers attempted to exclude the economists completely from the formulation of the report the division was not simply one between angels and legally trained devils consider the question of price discrimination economists insisted that price discrimination could persist only under noncompetitive conditions under full competition rivals would undermine any attempt to sell part of the supply at a higher price the lawyers argued to the contrary

auctions and bidding a primer maybe the contractor was right to think bid jobs are different but it is more likely that he suffered from too simple a view of what is involved in preparing a competitive bid our analysis will show that even an experienced estimator working in familiar terrain can lose money if he doesn t understand the subtleties of competitive bidding the phenomenon experienced by the painting contractor known as the winner s curse is just one of the surprising and puzzling conclusions that have been turned up by modern research into auctions another is the theoretical proposition supported also by some experimental evidence that for example a sealed bid treasury bill auction in which each buyer pays a price equal to the highest rejected bid would yield more revenue to the treasury than the current procedure in which the winning bidder pays the seemingly higher amount equal to his own bid there are also subtle results that demonstrate the equivalence of such apparently different institutions as the standard sealed bid auction in which the auctioneer seller sells the goods to the highest bidder for a price equal to his bid and the dutch auction in which the auctioneer seller begins by asking a high price and gradually lowers the price until

a positive theory of the predatory state while the distinction between public and private goods is essential in developing a normative theory of non predatory states the focus of this article is on a positive theory of predatory states since the predatory relationship between the state and its subjects depends on the power of the state to grab or to appropriate coercively and the subject s ability to escape or hide the boundaries of the state are decided by the nature of the assets that can be taken more or less easily accordingly i will introduce a new distinction between captive and fugitive assets that positively captures the frontiers of a state space the us railroading in the nineteenth century provides an illustration regarding the explanatory power of an asset appropriating perspective of the state compared to a public goods approach

resolving uncertainty about the number of bidders in independent private value auctions an experimental analysis results from first price sealed bid auctions in which there is uncertainty regarding the number of bidders are reported consistent with recent theoretical findings concealing information regarding the number of bidders raises more revenue for the seller than revealing information individual bids show that 1 narrowly interpreted the nash equilibrium bidding theory underlying these theoretical predictions is rejected as less than 50 of all bids satisfy the strict inequality requirements of the theory but 2 a majority of the deviations from these inequality requirements favor the revenue raising predictions of the nash model and in a large number of cases involve marginal violations of the theory

collusion and the choice of auction auctions are used in many different markets including the leasing of a substantial fraction of the natural resources in the united states the procedures used in the auctions conducted by the federal government have been a continuing source of controversy one of the concerns has been the possibility of collusion among bidders this article shows that cartels are stable if the seller uses open ascending bid oral auctions but not if he uses sealed high bid auctions this may help to explain the frequent use of sealed high bid auctions

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

transactions costs technological choice and endogenous growth abstract hicks a theory of economic history clarendon press oxford 1969 argues that an important aspect of industrial development is the adoption of technologies requiring highly illiquid capital investments the adoption of such technologies becomes economically viable in the presence of low cost financial markets that provide liquidity to investors this observation provides a mechanism by which the costs of transacting in financial markets affect the equilibrium choice of technology productive efficiency and by implication growth we analyze how the costs of financial market transactions affect the set of technologies in use and the equilibrium growth rate transactions cost reductions may depending on the capital structure enhance or reduce growth journal of economic literature classification numbers d90 e13 g14

a branch and price algorithm and new test problems for spectrum auctions when combinatorial bidding is permitted in auctions such as the proposed fcc auction 31 the resulting full valuations and winner determination problem can be computationally challenging we present a branch and price algorithm based on a set packing formulation originally proposed by dietrich and forrest 2002 a column generation approach for combinatorial auctions in mathematics of the internet e auction and markets the ima volumes in mathematics and its applications vol 127 springer verlag new york 15 26 this formulation has a variable for every possible combination of winning bids for each bidder our algorithm exploits the structure of the xor of or bidding language used by the fcc we also present a new methodology to produce realistic test problems based on the round by round results of fcc auction 4 we generate 2 639 test problems which involve 99 items and are substantially larger than most of the previously used benchmark problems because there are no real life test problems for combinatorial spectrum auctions with the xor of or language we used these test problems to observe the computational behavior of our algorithm our algorithm can solve all but one test problem within 10 minutes appears to be very robust and for difficult instances compares favorably to the natural formulation solved using a commercial optimization package with default settings although spectrum auctions are used as the guiding example to describe the merits of branch and price for combinatorial auctions our approach applies to auctions of multiple goods in other scenarios similarly

a theory of price control price or rent control is but one of many forms of legislative action which interfere with private contracting in the market place to delimit the scope of my analysis i shall use the term price control to refer only to any set of regulations which satisfies the following three conditions first the control must fix the price or income terms of private contracts this categorically excludes any laws which regulate the distribution of income among the contracting parties on a share or percentage basis 2 second the control must involve no appropriation of proceeds to or from the government taxation and subsidization are thus excluded finally the fixing of price must not be associated with direct government sales purchases or manipulation of resources so as to maintain the regulated price 3 by this stipulation price support is also excluded even on such terms legal regulations to control price are still many and varied to evaluate our understanding of the class of phenomena which we seek to explain it is essential that we discover implications refutable by facts by this criterion the available body of economic theory pertaining to price control is deficient indeed the massive literature on the subject offers few such implications 4 an alternative approach to analyzing the observable effects of price control is presented here

rational bandits plunder public goods and the vikings the paper applies and extendsinsights from mancur olson s study of statemaking to the vikings in a world ofroving bandits a sub optimal provision ofpublic goods exists most notably ofsecurity roving banditry leads toover plundering and zero profits for theplunderers which makes stationary banditryprofitable the most efficient banditsmonopolize violence begin to tax andprovide some amounts of public goods inorder to stimulate economic growth theanalysis demonstrates how the vikings activities and settlements are consistentwith such an explanation with the dynamicsof the process being reflected in thevariation in the number of raids and theamount of wealth extracted

restricted coasean bargaining we investigate the efficiency of coasean bargaining when restrictions are placed on the set of feasible bargaining outcomes when property rights are costly to defend appropriate we find bargaining restrictions may be pareto superior to unconstrainedvoluntary exchange under cost uncertainty over the harmful activity we show an efficient configuration of restrictions must balance the potential reduction in appropriation costs with the possibility of allocatively inefficient bargaining restrictions for an all pay auction we find conditions where precluding bargaining is always ex ante preferable to unrestricted bargaining for cases where the restrictions are contested we show conditions for the continuing existence of welfare improvements

split awards procurement and innovation in many procurement settings it is possible for a buyer to split a production award between suppliers in this article we develop a model of split award procurement auctions in which the split choice is endogenous we characterize the set of equilibrium bids and allocations for optimizing agents in an environment in which suppliers are fully informed about each other s costs split award equilibria simultaneously exhibit strong collusive features and cost efficiency properties despite the former property of the equilibria upstream investment considerations may lead a buyer to prefer a split award auction format to a winner take all auction format

investor protection optimal incentives and economic growth does investor protection foster economic growth to assess the widely held affirmative view we introduce investor protection into a standard overlapping generations model of capital accumulation better investor protection implies better risk sharing because of entrepreneurs risk aversion this results in a larger demand for capital this is the demand effect a second effect the supply effect follows from general equilibrium restrictions better protection i e higher demand increases the interest rate and lowers the income of entrepreneurs decreasing current savings and next period s supply of capital the supply effect is stronger the tighter are the restrictions on capital flows our model thus predicts that the positive effect of investor protection on growth is stronger for countries with lower restrictions cross country data provide support for this prediction as does the detailed examination of the growth experiences of south korea and india

integrating social conflict into economic theory the generalisation of coasian theorem to the power relationship amounts to depicting conflict as a bargaining process between conflictual parties that are simultaneously both partners and adversaries this perspective leads to different models of rational conflicts i e a threat of conflict without any real clash an alternative approach is developed by different models inspired by the public choice school which build upon the logic of coercive power within the framework of a self interested behaviour the integration of social conflicts in a narrowly defined individual cost benefit theoretical framework has resulted in reducing social conflict to real private but not social conflict in other words economic theory has considered social protesters either as potential or actual looters but rarely as a group of people struggling for a common cause integration of social conflict into economic theory will require i abandoning the ubiquitous market model when describing conflictual relationships ii accepting the logic of force or coercive power as a starting point and iii expanding the idea of interest to include encompassing including class interest

public policies pressure groups and dead weight costs abstract this paper presents a model of competition among special interest groups for political influence each active group exerts pressure to affect its taxes and subsidies where activities of different groups are related by the equality between total tax collections and total tax subsidies the dead weight costs and benefits of taxes and subsidies play a major role in our model an increase in the dead weight cost of taxation encourages pressure by taxpayers while an increase in the dead weight costs of subsidies discourages pressure by recipients various applications of the analysis are discussed