deciding between competition and collusion we develop an approach to identify and test for bid rigging in procurement auctions first we introduce a general auction model with asymmetric bidders second we study the problem of identie cation in our model we state a set of conditions that are both necessary and sufe cient for a distribution of bids to be generated by a model with competitive bidding third we discuss how to elicit a prior distribution over a e rm s structural cost parameters from industry experts given this prior distri bution we use bayes s theorem to compare competitive and collusive models of industry equilibrium finally we apply our methodology to a data set of bidding by construction e rms in the midwest the techniques we propose are not computationally demanding use e exible functional forms and can be programmed using most standard statistical packages

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

testing for asymmetric information in insurance markets the first goal of this paper is to provide a simple and general test of the presence of asymmetric information in contractual relationships within a competitive context we also argue that insurance data are particularly well suited to such empirical investigations to illustrate this claim we use data on contracts and accidents to investigate the extent of asymmetric information in the french market for automobile insurance using various parametric and nonparametric methods we find no evidence for the presence of asymmetric information in this market

empirical implications of equilibrium bidding in first price symmetric common value auctions this paper studies federal auctions for wildcat leases on the outer continental shelf from 1954 to 1970 these are leases where bidders privately acquire at some cost noisy but equally informative signals about the amount of oil and gas that may be present we develop tests of rational and equilibrium bidding in a common values model that are implemented using data on bids and ex post values we also use data on tract location and exposr values to test the comparative static prediction that bidders may bid less aggressively in common value auctions when they expect more competition we find that bidders are aware of the winner s curse and their bidding is largely consistent with equilibrium

disentangling the college wage premium estimating a model with endogenous education choices this article proposes and empirically implements a structural model of education choices and wage determination to quantitatively evaluate the contributions of productivity enhancement and ability signaling in the college wage premium the model is estimated under various distributional parameterizations using 1990 u s census 5 public use micro sample under these parameterizations i find that college education enhances attendees productivity by about 40 and productivity enhancement accounts for close to two thirds of the college wage premium

on the harm from mergers in input markets abstract this paper examines the additional social harm done by mergers in input markets that lead to higher prices when those increases are then passed downstream through other distribution stages that are themselves imperfectly competitive it is shown that measures of deadweight loss coming from simply looking at the derived upstream demand curve as usually done in merger cases can greatly understate the true deadweight loss generated through the distribution channel these results have important implications for competition authorities reviewing mergers particularly when they trade off the harm to competition added deadweight loss and merger generated efficiencies

buyer collusion and efficiency of government intervention in wheat markets in northern india an asymmetric structural auctions analysis this paper uses auction theory to analyze wholesale markets for wheat in northern india this approach enables us not only to characterize the market in terms of buyer asymmetries but also to detect the existence of collusion and to quantify its impact on market prices we show that buyer asymmetries exacerbate the downward impact of collusion on prices the paper also demonstrates the use of auction theory to analyze questions of government efficiency it considers whether the government paid too much for the wheat it procured at the minimum support price and shows that for our sample it did not the paper is based on a primary survey of two wholesale markets in north india

clashing paradigms total quality financial restructuring and theories of the firm the american corporate sector saw major reform movements during the 1980s despite frequent admixture in practice two key movements can be singled out as analytically distinct financial restructuring generally debt financed often involving mergers and total quality management a particular approach to productive restructuring unfortunately the precepts and practices of these movements often clashed this paper examines these tension and explores them by reference to economic theories of the firm associated with each movement while financial restructuring has been interpreted through the lens of neoclassical agency theory total quality management has strong links with alternative approaches that can be grouped under the heading capabilities theory copyright 1997 by oxford university press

econometrics of ascending auctions by quantile regression this paper suggests an identification and estimation approach based on quantile regression to recover the underlying distribution of bidders private values in ascending auctions under the ipv paradigm the quantile regression approach provides a flexible and convenient parameterization of the private values distribution with an estimation methodology easy to implement and with several specification tests the quantile framework provides a new focus on the quantile level of the private values distribution in particular the seller s optimal screening level which can be very useful for bidders and seller an empirical application using data from the usfs timber auctions illustrates the methodology

timber sale auctions with random reserve prices this paper analyzes first price sealed bid auctions of standing timber organized by the french forest service office national des forets onf a feature of these auctions is that they are held wi

empirical contract theory the case of insurance data abstract while contract theory has reached a high degree of sophistication econometric applications remain scarse one often invoked reason is that adequate data is hard to find we argue that insurance data fit especially well the requirements of econometric testing then we propose some insights on how insurance data can be used to test the predictions of contract theory as an illustration we present some preliminary empirical results relative to the existence of adverse selection of the rothschild and stiglitz type in automobile insurance

an empirical model of the multi unit sequential clock auction we construct a model of participation and bidding at multi unit sequential clock auctions when bidders have multi unit demand we describe conditions sufficient to characterize a symmetric perfect bayesian equilibrium and then demonstrate that this equilibrium induces an efficient allocation we propose an algorithm based on the generalized vickrey auction to calculate the expected winning bid for each unit sold this algorithm allows us to construct a simulation based estimator of the parameters for both the participation process and the distribution of latent valuations we apply our method to data from 37 multi lot sequential english auctions of export permits for timber held in russia copyright 2006 john wiley sons ltd

optimal bidding in auctions from a game theory perspective abstract the game theoretic perspective in auction bidding has provided a powerful normative framework for the analysis of auctions and it has generated an impressive volume of research contributions tracing this research we review key recent advances which have greatly expanded our understanding of the operation of auctions and produced a more accurate analysis of mechanism design and optimal bidding we follow various experimental studies which have shown that the predictive power of auction theory remains in many cases limited for this reason we concentrate on research themes which enhance the applicability of auction theory leading to more realistic descriptions of bidding behaviors we identify important innovations which expand the environment of auction bidding and carry us beyond rational decision making we conclude providing directions of future research and discussing their implications

identification in first price and dutch auctions when the number of potential bidders is unobservable within the ipv paradigm we show nonparametric identication of model primitives forrst price and dutch auctions with a binding reserve price and auction specic unobservable sets of potential bidders

an empirical study of an auction with asymmetric information this paper examines federal auctions for drain age leases on the outer continental shelf from 1959 to 1969 these are leases that are adjacent to tracts on which a deposit has been discovered the authors find that the data strongly support the hypotheses that neighbor firms are better informed about the value of a lease than nonneighbor firms that neighbor firms coordinate their bidding decisions and that both types of firms bid strategically in accordance with the bayesian nash equilibrium model for first price sealed bid auctions with asymmetric information

game theory econometric models application to procurements in the space industry abstract this paper presents a structural econometric analysis of procurements in the space industry we analyse bidimensional tenders in price and quality the econometric specification assumes that bidders use nash equilibrium strategies these strategies are derived analytically or computed by monte carlo procedures

equilibrium reserve prices in sequential ascending auctions abstract we study a model where bidders have perfectly correlated valuations for two goods sold sequentially in two ascending price auctions the seller sets a reserve price before the beginning of each auction despite the lack of commitment by the seller we characterize an equilibrium and study its properties strategic non disclosure of information takes the form of non participation in the early auction by low valuation bidders while high valuation bidders bid up to their true valuations some buyers who would profitably buy at the reserve price refrain from participating in order to decrease the second auction reserve price

cartel damages claims and the passing on defense we develop a general framework for computing cartel damages claims we decom pose a direct purchaser plainti s lost pro ts in three parts the price overcharge the pass on eect and the output eect the output eect is usually neglected it is the lost business resulting from passing on the price overcharge to evaluate the relative importance of the three eects we introduce various models of imperfect competition for the plainti s industry we show that the passing on defense generally remains jus ti ed after accounting for the output eect provided that the cartel aects a su cient number of rms we derive exact discounts to the price overcharge and illustrate how to compute these in the european vitamin cartel we nally extend our framework to measure the cartel s total harm i e the total damages to direct purchasers and their consumers

an empirical equilibrium model of a decentralized asset market i estimate a search and bargaining model of a decentralized market to quantify the effects of trading frictions on asset allocations and asset prices and to quantify the effects of intermediaries that facilitate trade using business aircraft data i find that relative to the walrasian benchmark 12 4 percent of the assets are misallocated and prices are approximately 27 3 percent lower dealers play an important role in reducing frictions in a market with no dealers 15 7 percent of the assets would be misallocated perhaps surprisingly in a market with no dealers prices would increase by 2 8 percent because sellers outside options improve relative to buyers thus counteracting the effects of higher search costs and slower trade on asset prices

empirical testing of auction theory given the state of affairs in auction theory there is at least one model for instance to support any position one would care to take concerning the revenue of sealed bid vs open auctions it should not come as a surprise that a fair amount of empirical work in auctions is underway this paper reports the results of some recently completed research i first discuss papers in which the predictions being tested derive directly from the pure theory of auctions and then papers in which the predictions arise out of an application of auction theory to a related institution

the distribution of harm in price fixing cases we consider a vertically related industry and analyze how the total harm due to a price increase upstream is distributed over downstream firms and final consumers for this purpose we develop a general model without making specific assumptions regarding demand costs or the mode of competition we consider both the case of homogeneous and differentiated goods markets and illustrate how basic intuition from the tax incidence literature carries over to the distribution of harm furthermore we discuss data requirements and suggest explicit formulas and regression specifications that can be used to estimate the relevant terms in the harm distribution in practice

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

posterior odds comparison of a symmetric low price sealed bid auction within the common value and the independent private values paradigms i attempt to decide using the posterior odds ratio whether the symmetric common value paradigm or the symmetric independent private values paradigm is a more probable explanation of the low price sealed bid auctions conducted by the indian oil corporation to purchase crude oil from the international market the estimation approach is structural parametric the auctions are modelled as static non cooperative games of incomplete information with risk neutral bidders i conclude that the symmetric independent private values paradigm is more probable copyright 1999 john wiley sons ltd

information feedback in first price auctions i apply the notion of a self confirming equilibrium sce to study how feedback in first price auctions influences bidders perceptions about their strategic environment and consequently their bidding behavior in a private values setting revealing the two highest bids at the end of each auction is sufficient for bidders to have correct beliefs justifying the assumption of nash equilibrium in contrast in every symmetric sce of a symmetric affiliated private values model bidding strategies and revenue are weakly higher if only the highest bid is revealed i also consider interdependent valuations and discuss implications for the empirical auction literature

asian crisis and the future of the japanese model asia s version of capitalism emphasising not markets but government planning and long term relationships is now widely regarded as a problem rather than a solution 1 gone are all the self confident claims about the superiority of asian values 2 and asian gloom is matched by american triumphalism markets win goethe was right america has it better

econometrics of first price auctions a survey of the theoretical and applied literature the analysis of auctions is an active area of research for both theoretical and empirical economists this paper provides an overview of the literature relevant to the econometrics of auctions from a structural approach perspective the structural approach is a framework to analyze auction data in which theory and econometrics are closely related there are three fundamental issues at the heart of the structural analysis i are there any testable restrictions imposed by the theoretic model on the data ii is it possible to identify the structural elements that characterize an auction without a priori parametric information iii what can be said about feasible estimation procedures which do not rely on parametric assumptions this survey shows how the structural approach literature has answered each question

structural econometric analysis of descending auctions since vickrey s 1961 paper the theory of auctions has considerably expanded particularly over the last decade see e g milgrom 1985 1986 and mcafee and mcmillan 1987 for recent surveys in contrast except for some experimental work only a few empirical studies have attempted to validate the new theoretical auction models using field auction data two approaches have emerged the first has concentrated upon testing some implications of the theory of auctions using reduced form econometric models with observed bids as the explained variables explanatory variables might then be the reservation price the number of potential bidders when observed and some characteristics of the auctioned object examples are hansen 1985 1986 hendricks et al 1987 and hendricks and porter 1988 the second approach which is structural has a long tradition in econometrics starting from the work of the cowles commission this approach is followed in this paper the basic idea is simple and relies upon

the japanese economy and corporate reform what path to sustainable prosperity in the 1980s as japan reaped the rewards of its extraordinary economic development of the post world war ii decades companies around the world sought to learn from japanese managerial practices even as in the united states financial interests including a growing number of corporate ceos were more aggressively advocating maximization of shareholder value as a managerial ideology within american industrial corporations slogans such as total quality management also vied for attention goldstein 1997 but the collapse of japan s bubble economy in 1990 and the persistence of recessionary conditions during the 1990s have raised doubts about the viability of the japanese model particularly in the west but increasingly in japan as well japan s negative rates of economic growth in 1997 and 1998 have prompted calls for japanese corporations to embrace the corporate governance principle of maximizing shareholder value

modeling and analysis of an auction based logistics market we consider a logistics spot market where the transportation orders from a number of firms are matched with two types of carriers through a reverse auction in the spot market local carriers compete with in transit carriers that have lower costs in order to analyze the effects of implementing a logistics spot market on these three parties firms local carriers and in transit carriers and also the effects of various system parameters we develop a two stage stochastic model we first model the auction in a static setting and determine the expected auction price based on the number of carriers engaging in the auction and their cost distributions we then develop a continuous time markov chain model to evaluate the performance of the system in a dynamic setting with random arrivals and possible abandonment of orders and carriers by combining these two models we evaluate the performance measures such as the expected auction price price paid to the carriers distribution of orders between local and in transit carriers and expected number of carriers and orders waiting at the logistics center in the long run we present analytical and computational results related to the performance of the system and discuss operation of such a logistics spot market in turkey

testing for common costs in the city of helsinki bus transit auctions abstract i study the effects of competition in the city of helsinki bus transit market by conducting two tests for common costs in these first price sealed bid procurement auctions i introduce bidder asymmetry and pooling to the tests i also discuss the need for robustness checks for some arbitrary choices in these tests the information environment seems to be that of common costs the bus companies that have garages close to the contracted routes are influenced more by the common elements than those whose garages are further away more competition does not necessarily lower procurement costs and the city should not necessarily implement costly policies to induce more competition a recent merger of two public companies cannot be criticized from a competition perspective

reputation in repeated second price auctions abstract a model in which two bidders take part in a series of second price comon value auctions is examined the question of an optimal auction from an auctioneer s standpoint in a repeated auction setting is partially addressed it is shown that the results from single auction models do not carry over to repeated auctions when one of the bidders is endowed with a reputation for bidding aggressively second price auctions with two bidders are highly susceptible to manipulative behaviour by an aggressive bidder and yield much lower revenues to the auctioneer

econometrics of first price auctions in this paper we propose an estimation method for the empirical study of theoretical auction models we focus on first price sealed bid and descending auctions and we adopt the private value paradigm where each bidder is assumed to have a different private value only known to him for the object that is auctioned following mcfadden 1989 and pakes and pollard 1989 our proposed method is based on simulations specifically the method relies on a simulated nonlinear least squares objective function appropriately adjusted so as to obtain consistent estimates of the parameters of interest we illustrate the proposed method by studying a market of agricultural products where descending auctions are used our analysis takes into account heterogeneity of the auctioned objects and the fact that only the winning bid is observed we estimate the parameters that characterize the distribution of the unobserved private values for each auctioned object

homogenous and heterogenous contestants in piece rate tournaments theory and empirical analysis in this article we show that sorting different ability contestants in piece rate tournaments into more homogenous groups alters agents incentives to exert effort we propose a method for structurally estimating the piece rate tournament game with heterogenous players and apply it to the payroll data from a broiler production contract our counterfactual analysis shows that under reasonable assumptions both the principal and the growers can gain when the tournament groups are heterogenized this business strategy could be difficult to implement in real life settings however this article has supplementary material online

measuring the true harm from price fixing to both direct and indirect purchasers legal actions by direct and indirect purchasers to recover damages from price fixing common in the united states for years are now appearing in a number of other countries traditional measures of damages are flawed as measures of the true harm suffered and will often significantly understate that true harm this paper provides measures of the degree of understatement of the true harm when traditional approaches are used and shows how the size of the error depends on the degree of competitiveness of downstream markets the paper also provides measures of distribution of the true harm between direct and indirect purchasers

the unsupportable support price an analysis of collusion and government intervention in paddy auction markets in north india abstract this paper uses auction theory incorporating buyer asymmetry to analyse the structure of a small market for parmal paddy in north india and to assess the implications of alternative government policies our results suggest that two buyers collude in this market we are able to quantify the extent to which prices are depressed as a consequence such collusion probably characterizes many small grain markets in india government intervention in grain markets in india is pervasive and has in recent years led to its acquiring excessive food stocks and an unwillingness to enforce the support price using simulations we demonstrate that while reducing the support price for paddy may not have the desired effect of reducing government purchases a decrease in the percentage that millers are required to sell as levy to the government will

semiparametric estimation of first price auctions with risk averse bidders in view of the non identification of the first price auction model with risk averse bidders this paper proposes some parametric identifying restrictions and a semiparametric estimator for the risk aversion parameter s and the latent distribution of private values specifically we exploit heterogeneity across auctioned objects to establish semiparametric identification under a conditional quantile restriction of the bidders private value distribution and a parameterization of the bidders utility function we develop a multistep semiparametric method and we show that our semiparametric estimator of the utility function parameter s converges at the optimal rate which is slower than the parametric one but independent of the dimension of the exogenous variables thereby avoiding the curse of dimensionality we then consider various extensions including a binding reserve price affiliation among private values and asymmetric bidders the method is illustrated on u s forest service timber sales and bidders risk neutrality is rejected

using all bids in parametric estimation of first price auctions abstract recently laffont et al 1995 have proposed an snlls estimator using winning bids only here we derive a relationship between the means of observed bids and private values to propose an snlls estimator using all bids in first price auctions

asymmetry in procurement auctions evidence from snow removal contracts differences in cost efficiency and productivity across firms may introduce asymmetries in procure ment auctions relying on a structural approach this article investigates potential asymmetry among firms bidding for snow removal contracts in montrthe empirical results show that firms located in close proximity have a cost advantage relative to other firms in the most urbanised part of montrbecause of prohibitive equipment storage costs the extent of inefficiency due to asym metry is empirically assessed various policy experiments are performed a bidding preference policy shows that the city could expect to reduce its costs for allocating snow removal contracts when bidders willingness to pay depends in part on observable variables the princi pal s interest is not best served by creating a level auction playing field this article studies procurement auctions for snow removal contracts in montrit investigates the degree to which companies in disadvantageous locations should win even if they do not submit the lowest bid from the submitted bids a novel empirical methodology estimates the extent of cost variation across firms along with its variation within loca tion although the dispersion is substantial the gain from treating bidders unequally is limited when observed individual characteristics affect the firms costs and their bidding strategies all bidders cannot be treated alike these differences in characteristics or asymmetries among bidders may arise from their size as noted by laffont et al 1995 their capacity constraints as in jofre bonet and pesendorfer 2003 or the possession of better information as in hendricks and porter 1988 and hendricks et al 1994

experimental development of sealed bid auction theory calibrating controls for risk aversion we offer a brief survey of bidding theory in high price auctions of experimental studies of behavior in such auctions and of the interplay between the design and results of the experiments and efforts to further develop the theory two new series of experiments are reported the first applies a convex transformation of payoffs in an attempt to induce a lowering of subject bids as if the bidders had become less risk averse the second applies a method for inducing any prespecified utility function for risky choices on an individual we use it to induce as if risk neutral behavior both series use baseline control to calibrate the hypothesized effect of the procedures on riskaverse behavior

auctioning and bargaining an econometric study of timber auctions with secret reservation prices this article considers a first price sealed bid auction at which the seller s reservation price is not announced in advance we allow for a second round of bargaining and consider the nash bargaining outcome when the object is unsold after the auctioning round we characterize the bidders and seller s bayesian nash equilibrium strategies the distributions of the buyers and seller s private values are estimated by nonlinear least squares from auction data on standing timber while solving numerically the differential equations characterizing the seller s and buyers equilibrium strategies the performance of the estimated model is then compared to a model in which the players behave myopically

semiparametric estimation of the optimal reserve price in first price auctions the optimal reserve price in the independent private value paradigm is generally expressed as a functional of the latent distribution of private signals which is by nature unobserved this feature has limited the implementation of the optimal reserve price in practice in this article we consider first price auctions within the general affiliated private values paradigm we show that the seller s expected profit can be written as a functional of the observed bid distribution we propose a semiparametric extremum estimator for estimating consistently the optimal reserve price from observed bids as an illustration we consider the outer continental shelf ocs wildcat auctions

identification and estimation of auction models with unobserved heterogeneity in many procurement auctions the bidders unobserved costs depend both on a common shock and on idiosyncratic private information assuming a multiplicative structure i derive sufficient conditions under which the model is identified and propose a non parametric estimation procedure that results in uniformly consistent estimators of the cost components distributions the estimation procedure is applied to data from michigan highway procurement auctions private information is estimated to account for 34 of the variation in bidders costs it is shown that accounting for unobserved auction heterogeneity has important implications for the evaluation of the distribution of rents efficiency and optimal auction design

information returns and bidding behavior in ocs auctions 1954 1969 this paper examines federal auctions for leases on the outer continental shelf in the light of the predictions of the first price sealed bid common values model of auctions the authors find that the data strongly support the model for auctions in which one bidder is better informed than the other bidders the evidence for auctions in which bidders have noisy but qualitatively similar information is less conclusive but is consistent with a model in which each bidder does not know either the actual or potential number of bidders on a lease copyright 1987 by blackwell publishing ltd

first price auctions with general information structures implications for bidding and revenue we explore the impact of private information in sealed bid first price auctions for a given symmetric and arbitrarily correlated prior distribution over values we characterize the lowest winning bid distribution that can arise across all information structures and equilibria the information and equilibrium attaining this minimum leave bidders indifferent between their equilibrium bids and all higher bids our results provide lower bounds for bids and revenue with asymmetric distributions over values we also report further characterizations of revenue and bidder surplus including upper bounds on revenue our work has implications for the identification of value distributions from data on winning bids and for the informationally robust comparison of alternative auction mechanisms

performance responses to competition across skill levels in rank order tournaments field evidence and implications for tournament design tournaments are widely used in the economy to organize production and innovation we study individual data on 2775 contestants in 755 software algorithm development contests with random assignment the performance response to added contestants varies nonmonotonically across contestants of different abilities precisely conforming to theoretical predictions most participants respond negatively whereas the highest skilled contestants respond positively in counterfactual simulations we interpret a number of tournament design policies number of competitors prize allocation and structure number of divisions open entry and assess their effectiveness in shaping optimal tournament outcomes for a designer

identification of standard auction models this paper presents new identification results for models of first price second price ascending english and descending dutch auctions we consider a general specification of the latent demand and information structure nesting both private values and common values models and allowing correlated types as well as ex ante asymmetry we address identification of a series of nested models and derive testable restrictions enabling discrimination between models on the basis of observed data the simplest model symmetric independent private values is nonparametrically identified even if only the transaction price from each auction is observed for richer models identification and testable restrictions may be obtained when additional information of one or more of the following types is available i the identity of the winning bidder or other bidders ii one or more bids in addition to the transaction price iii exogenous variation in the number of bidders iv bidder specific covariates while many private values pv models are nonparametrically identified and testable with commonly available data identification of common values cv models requires stringent assumptions nonetheless the pv model can be tested against the cv alternative even when neither model is identified

the chandlerian corporation and the theory of innovative enterprise through the synthesis of business history into a coherent and powerful analytical framework alfred chandler made an enduring intellectual contribution to the social sciences this essay outlines the implications of chandler s perspective for the theory of innovative enterprise embeds that theory in the social conditions of innovative enterprise analytical framework demonstrates the illogic of the neoclassical monopoly model and contends that the analysis of the dynamics and performance of industrial capitalism requires a methodology that integrates theory and history

the simultaneous ascending auction dynamics of price adjustment in experiments and in the uk3g spectrum auction we develop a model of the behavior of bidders in simultaneous ascending auctions based on two principles principle of surplus maximization and principle of bid minimization these principles lead to models of both price dynamics and equilibration leading to disequlibrium structural equations that can be used for estimating bidder values the intention behind the development of this methodology is to provide an auctioneer a method of extracting information during an auction about possible closing prices we benchmark the performance of the model with data from experimental auctions and then apply it to the uk umts or third generation mobile auction

strategic ex ante contracts rent extraction and opportunity costs this article cosiders the possibility that a seller can contract with one uninformed buyer prior to an auction involving two potential buyers the seller s optimal strategic ex ante contract more accurately reflects joint opportunity costs of the seller and the contracted buyer and therefore extracts more rent from the entrant moreover this ex ante contract mitigates the seller s ex post rent seeking vis a vis the contracted buyer accordingly it may create more social welfare than the absence of ex ante contracts depending upon the contracted buyer s financial constraint and the distributions of trade surplus implementation of the optimal strategic ex ante contract and policy implications are discussed

theory and misbehavior of first price auctions recent experimental evidence appears to reject simple nash equilibrium models of bidding behavior in first price auctions the author presents a methodological critique of this evidence existing tests have concentrated on deviations of subjects from predictions in the message space of the action bid deviations the author suggests that it is more natural to evaluate subject behavior in expected payoff space he concludes that the evidence against the simple models is not significant enough to warrant their rejection copyright 1989 by american economic association

multi dimensional reference dependent preferences in sealed bid auctions how most laboratory experiments differ from the field abstract we study bidding behavior in first and second price sealed bid auctions with loss averse agents our model predicts overbidding in first price induced value auctions consistent with evidence from most laboratory experiments substantially different bidding behavior could result in commodity auctions where money and auction item are consumed along different dimensions of the consumption space differences also result in second price auctions our study thereby indicates that transferring qualitative behavioral findings from induced value laboratory experiments to the field may be problematic if subjects are loss averse

economic valuation of environmental quality using property auction data a structural estimation approach this study proposes a method to economically evaluate environmental quality using property auction data our approach is consistent with microeconomic auction theory and can directly estimate the value function from the data a task that is often difficult when using conventional revealed preference methods such as the hedonic approach we use a method of simulated moments to estimate the value function which in turn is used to calculate the economic value of environmental quality changes we apply this method to data on foreclosure property auctions in tokyo in order to economically evaluate hypothetical improvements in neighborhood fire risks

input control in agricultural production contracts tion problems there will be distortionary effects on industry output and returns from production will be distributed in a predictable way regardless of the underlying motivation for contract design the resulting distribution of returns and risks is likely to differ from the traditional spot market distribution understanding the incentives underlying the design of agricultural production contracts will aid in predicting their influence on the distribution of returns as their usage increases in addition to its practical importance the economic analysis of agricultural production contracts provides an opportunity to test contract theory empirically over the past twenty years contract theory or mechanism design has burgeoned as an area of theoretical analysis this growth in the theory has not been matched by an accompanying empirical literature there has been only a limited amount of empirical work in these areas primarily on auctions as well as executive compensation and franchising cf laffont ossard and vuong jensen and murphy and lafontaine agricultural production contracts provide an opportunity to test whether asymmetric information models have explanatory value i consider whether such models are sometimes observationally equivalent to other economic models and what research techniques will aid in distinguishing among explanations i address these issues in the context of a

the winner s curse reserve prices and endogenous entry empirical insights from ebay auctions internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce we examine a unique data set of ebay coin auctions to explore the determinants of bidder and seller behavior we begin by documenting a number of empirical regularities in our data set of ebay auctions next we specify and estimate a structural econometric model of bidding on ebay using our parameter estimates from this model we measure the extent of the winner s curse and simulate seller revenue under different reserve prices