stochastic stability in a double auction abstract in a k double auction a buyer and a seller must simultaneously announce a bid and an ask price respectively exchange of the indivisible good takes place if and only if the bid is at least as high as the ask the trading price being the bid price with probability k and the ask price with probability 1 k we show that the stable equilibria of a complete information k double approximate an asymmetric nash bargaining solution with the seller s bargaining power decreasing in k note that ceteris paribus the payoffs of the seller of the one shot game increase in k nevertheless as the stochastically stable equilibrium price decreases in k choosing the seller s favorite price with a relatively higher probability in individual encounters makes him worse off in the long run

british regional growth and sectoral trends global and local spatial econometric approaches this article looks beneath the surface of british sub regional aggregate gross value added gva growth over the period 1995 to 2007 by examining how the differing growth dynamics of the secondary and services sectors have influenced the overall regional growth process a spatial econometric analysis is undertaken which tests regional secondary and services real gva per capita for absolute and conditional convergence at the nuts 3 level both local and global spatial analysis techniques are utilized in order to gain a detailed insight into the growth process over the period 1995 to 2007

productivity convergence in the european regions 1980 2003 a sectoral and spatial approach this article analyses the evolution of the eu productivity between 1980 and 2003 both across regions and sectors by making use of various techniques cross section nonparametric and spatial approaches it concludes that 1 the regional and sectoral dispersion of productivity is quite high 2 the gains experienced in aggregate productivity are due entirely to the sectors productivity growth effect 3 there is a weak beta convergence process at the aggregate and sectoral levels 4 the accounting decomposition of the aggregate productivity convergence process reveals the sectoral productivity growth effect to be the only responsible factor for regional catching up 5 finally there are clear signs of spatial dependence which when properly addressed increase the speed of convergence at the aggregate level

convergence to efficiency in a simple market with incomplete information a model of trade with m buyers and m sellers is considered in which price is set to equate revealed demand and supply in a bayesian nash equilibrium each trader acts not as a price taker but instead misrepresents his true demand supply to influence price in his favor this causes inefficiency we show that in any equilibrium the amount by which a trader misreports is o 1 m and the corresponding inefficiency is o 1 m2 the indeterminacy and the inefficiency that is caused by the traders bargaining behavior in small markets thus rapidly vanishes as the market increases in size

private food standards regulatory gaps and plantation agriculture social and environmental ir responsibility in the philippine export banana industry the expansion of retailer led food production standards over recent years has seen certification against such standards become a de facto condition of access to numerous supply chains globalg a p standards in particular have extended the traditional focus of retailer led standards beyond food safety to include compliance points addressing environmental protection and labour welfare this has stimulated considerable research on the implications of standards compliance for small producers however little attention has been paid either to the relationships between so called private standards and state based regulatory regimes or to the implications of standards compliance for corporate farms their employees and neighbouring communities this paper examines these relationships and implications in the context of plantation banana production in the philippines focussing in particular on gaps that emerge between the ideals of social and environmental responsibility embodied in private standards and actual practices of regulation it finds that while compliance with private standards is associated with comparatively favourable treatment of labour deference to poorly enforced national legislation conceals ongoing human rights and environmental concerns

optimal trading mechanisms with ex ante unidentified traders abstract we analyze optimal trading mechanisms in an exchange economy where each trader owns some units of a good to be traded and may be either a seller or a buyer depending on the realization of the privately observed valuations the concept of virtual valuation is extended to ex ante unidentified traders the traders virtual valuations now depend on the choice of the trading mechanism and are generally nonmonotonic we show that the trading mechanisms that maximize a broker s expected profit or expected total gains from trade are generalized double auctions which maximize the gains from trade measured in some modified monotonic virtual valuations for the traders the bunching phenomena will be a general feature in these mechanisms we also show that the optimal mechanisms converge towards simple bid ask price mechanisms as the number of participants in the market increases journal of economic literature classification numbers d44 d82

existence of equilibrium in single and double private value auctions we show existence of equilibria in distributional strategies for a wide class of private value auctions including the first general existence result for double auctions the set of equilibria is invariant to the tie breaking rule the model incorporates multiple unit demands all standard pricing rules reserve prices entry costs and stochastic demand and supply valuations can be correlated and asymmetrically distributed for double auctions we show further that at least one equilibrium involves a positive volume of trade the existence proof establishes new connections among existence techniques for discontinuous bayesian games

optimality versus practicality in market design a comparison of two double auctions we consider a market for indivisible items with m buyers and m sellers traders privately know their values costs which are statistically dependent two mechanisms are considered the buyer s bid double auction collects bids and asks from traders and determines the allocation by selecting a market clearing price it fails to achieve all possible gains from trade because of strategic bidding the designed mechanism is a revelation mechanism in which honest reporting of values costs is incentive compatible and all gains from trade are achieved this optimality however comes at the expense of plausibility i the monetary transfers among the traders are defined in terms of the traders beliefs about each other s value cost ii a trader may suffer a loss ex post iii the mechanism may run a surplus deficit ex post we compare the virtues of the simple yet mildly inefficient buyer s bid double auction to the flawed yet perfectly efficient designed mechanism

convergence across canadian provinces 1961 to 1991 the purpose of this study is to provide a new look at the evolution of regional disparities in canada in the light of the recent convergence studies produced by european and american economists the degree of convergence of a variety of per capita income and output measures from 1961 to today is analysed the empirical analysis suggests that there is evidence of convergence in canada for different measurements of per capita income and output since the early 1960s during this period convergence has been helped by a favorable change in terms of trade and by government transfers and taxes our estimates of the convergence speed for canadian provinces are of the same magnitude as those found for regions within the same country and across countries in european and american studies

pollution claim settlements reconsidered hidden information and bounded payments abstract a principal s production decision imposes a negative externality on an agent the principal may be a pollution generating firm the agent may be a nearby town the principal offers a contract to the agent who has the right to be free of pollution then the agent privately learns the disutility of pollution finally a production level and a transfer payment are implemented suppose there is an upper bound possibly zero on payments that the agent can make to the principal in the second best solution there is underproduction for low cost types while there is overproduction for high cost types in contrast to standard adverse selection models of pollution claim settlements there may thus be too much pollution compared to the first best solution

physical and human capital and brazilian regional growth a spatial econometric approach for the period 1970 2010 carvalho r and silveira neto r physical and human capital and brazilian regional growth a spatial econometric approach for the period 1970 2010 regional studies this paper identifies the determinants of economic growth and analyses the dynamics of income using a panel of 522 brazilian micro regions for period 1970 2010 based on the spatial extension of the mankiw romer weil mrw model and explicitly considering both physical and human capital the parameters of a spatial durbin model sdm with fixed effects are estimated the direct and indirect impacts of the determinants of regional growth are then calculated the results indicate strong spatial dependence among brazilian micro regions and that investments in both physical and human capital are important for the growth of the brazilian regional economies

competitive rational expectations equilibria without apology abstract consider a financial market with n risk averse asymmetrically informed traders when n grows at the same rate as noise trading prices in competitive and in strategic rational expectations equilibrium converge to each other at a rate of 1 n equilibria in the two scenarios are close when noise trading volume per informed trader is large in relation to risk bearing capacity both equilibria converge to the competitive equilibrium of a limit continuum economy as the market becomes large at a slower rate of 1 n the results extend to endogenous information acquisition and the connections with the grossman stiglitz paradox are highlighted

responsible retailing the practice of csr in banana plantations in costa rica during the last 10 years or so a number of corporate social responsibility csr initiatives have been introduced in global supply chains which aim to improve the conditions of workers engaged in producing goods for export this article discusses the observations of csr in practice in the costa rican united kingdom uk banana chain the banana chain makes for an interesting case study because there are dominant corporate actors at each end who are in a position to influence the conditions experienced by workers on banana plantations at the top of the chain there are four major uk supermarket groups who control access to the retail market and as self appointed guardians of consumer interest are demanding that producers adopt more socially responsible practices at the other end banana production is highly integrated and controlled by three large north american agri businesses who have developed their own social and environmental certification programmes costa rica also makes for an interesting country to locate the study as it has a tradition of state led policies to protect worker rights yet in spite of csr commitments made by both supermarkets and producers that emphasise health and safety and the country s established labour law this article shows that there are problems for workers when they are forced to meet demanding production schedules furthermore it suggests that whilst supermarkets continue to drive down consumer prices and put pressure on producers to reduce costs a downward spiral of working conditions is created regardless of the csr policies in place however this article also identifies that changes to supermarket behaviour is possible when consumer trust is at stake

almost dominant strategy implementation exchange economies abstract we relax strategy proofness a form of dominant strategy implementation by allowing small gains from manipulation in 2 agent exchange economies this relaxation is shown to have a discontinuous effect on the range of efficient rules demonstrating a type of non robustness in previous impossibility results when gains are measured with respect to a single good and preferences are linear we characterize a particular rule as being the most equitable among all efficient rules satisfying the relaxation

on the possibility of informationally efficient markets this paper presents conditions for a resolution of the grossman stiglitz paradox of informationally efficient markets we display a market with asymmetric information where a privately revealing equilibrium obtains in a competitive framework and where incentives to acquire information are preserved as long as the correlation in traders valuations is not too large the equilibrium is efficient and the problems associated with fully revealing rational expectations equilibria are precluded without resorting necessarily to noise traders the robustness of the results to general information structures is established and the effect of market power is examined in a large market approximation to the competitive economy the model is applied to explain changes in bidding behavior in central bank liquidity auctions in the crisis period jel d82 d84 g14 e59

stability in large matching markets with complementarities labor markets can often be viewed as many to one matching markets it is well known that if complementarities are present in such markets a stable matching may not exist we study large random matching markets with couples we introduce a new matching algorithm and show that if the number of couples grows slower than the size of the market a stable matching will be found with high probability if however the number of couples grows at a linear rate with constant probability not depending on the market size no stable matching exists our results explain data from the market for psychology interns

existence of equilibrium in large double auctions abstract we show the existence of a pure strategy symmetric increasing equilibrium in double auction markets with correlated conditionally independent private values and many participants the equilibrium we find is arbitrarily close to fully revealing as the market size grows our results provide strategic foundations for price taking behavior in large markets

harmful competition in insurance markets there is a general presumption that competition is a good thing in this paper we show that competition in the insurance markets can be bad and that adverse selection is in general worse under competition than under monopoly the reason is that monopoly can exploit its market power to relax incentive constraints by cross subsidization between different risk types cream skimming behavior on the contrary prevents competitive firms from using implicit transfers in effect monopoly is shown to provide better coverage to those buying insurance but at the cost of limiting participation to insurance performing simulation for different distributions of risk we find that monopoly in general performs much better than competition in terms of the realization of the gains from trade across all traders in equilibrium

tail expectation and imperfect competition in limit order book markets abstract perfect competition in liquidity provision in limit order markets is characterized by a tail expectation condition glosten 1994 in this paper we model imperfect competition in schedules by infinitely many liquidity suppliers quoting on a limit order book we show that there are zero rent mixed strategy equilibria featuring finite numbers of active liquidity suppliers none of the equilibria satisfies the competitive outcome not even on average considering a sequence of equilibria with the number of active liquidity suppliers becoming large we show that the aggregate stochastic marginal price schedule converges to the deterministic competitive marginal price schedule

the efficiency of competitive mechanisms under private information we consider the efficiency properties of exchange economies where privately informed traders behave strategically specifically a competitive mechanism is any mapping of traders reports about their types to an equilibrium price vector and allocation of the reported economy in our model some traders may have non vanishing impact on prices and allocations regardless of the size of the economy although truthful reporting by all traders cannot be achieved we show that given any desired level of approximation there is n such that any bayesian nash equilibrium of any competitive mechanism of any private information economy with n or more traders leads with high probability to prices and allocations that are close to a competitive equilibrium of the true economy in particular allocations are approximately efficient a key assumption is that there is small probability that traders behave non strategically

supply chain specific understanding the patchy success of ethical sourcing initiatives as a number of high profile companies have found to their cost corporate reputations can be significantly affected by firms management of sustainability issue including those that are outside their direct control such as the environmental and social impacts of their supply networks this paper begins by examining the relationship between corporate social responsibility reputation and supply network conditions it then looks at the effectiveness of one tool for managing supply network sustainability issues ethical sourcing codes of conduct by examining how the characteristics of three supply networks branded clothes diy wood products and branded confectionary affects the implementation ethical sourcing codes of conduct it ends by setting out conclusions on why implementation of such codes has been so much more successful in some sectors than others and recommendations on effective approaches to managing sustainability issues in supply networks

dynamic matching two sided incomplete information and participation costs existence and convergence to perfect competition consider a decentralized dynamic market with an infinite horizon and participation costs in which both buyers and sellers have private information concerning their values for the indivisible traded good time is discrete each period has length and each unit of time continuums of new buyers and sellers consider entry traders whose expected utility is negative choose not to enter within a period each buyer is matched anonymously with a seller and each seller is matched with zero one or more buyers every seller runs a first price auction with a reservation price and if trade occurs both the seller and the winning buyer exit the market with their realized utility traders who fail to trade continue in the market to be rematched we characterize the steady state equilibria that are perfect bayesian we show that as converges to zero equilibrium prices at which trades occur converge to the walrasian price and the realized allocations converge to the competitive allocation we also show the existence of equilibria for sufficiently small provided the discount rate is small relative to the participation

matching with couples stability and incentives in large markets accommodating couples has been a longstanding issue in the design of centralized labor market clearinghouses for doctors and psychologists because couples view pairs of jobs as complements a stable matching may not exist when couples are present this paper s main result is that a stable matching exists when there are relatively few couples and preference lists are suciently short relative to market size we also discuss incentives in markets with couples we relate these theoretical results to the job market for psychologists in which stable matchings exist for all years of the data despite the presence of couples

market power and information revelation in dynamic trading we study a strategic model of dynamic trading where agents are asymmetrically informed over common value sources of uncertainty there is a continuum of buyers and a finite number n of sellers all buyers are uninformed while at least one seller is privately informed about the true state of the world when n 1 full information revelation never occurs in equilibrium and the only information transmission happens in the first period with n 1 the outcome depends both on the structure of the sellers information and even more importantly on the intensity of competition allowed by the existing trading rules when there is intense competition absence of clienteles information is fully and immediately revealed to the buyers in every equilibrium for n large enough regardless of the number of informed sellers on the other hand for trading arrangements characterized by less intense forms of competition presence of clienteles for any n we always have equilibria where information is never fully revealed moreover in that case when only one seller is informed for many parameter configurations there are no equilibria with full information revelation even for large n jel c72 c78 d82 d83

the rate of convergence to perfect competition of matching and bargaining mechanisms abstract we study the steady state of a market with incoming cohorts of buyers and sellers who are matched pairwise and bargain under private information a friction parameter is the length of the time period until the next meeting we provide a necessary and sufficient condition for the convergence of mechanism outcomes to perfect competition at the linear rate in which is shown to be the fastest possible among all bargaining mechanisms the condition requires that buyers and sellers always retain some bargaining power the bargaining mechanisms that satisfy this condition are called nonvanishing bargaining power nbp mechanisms simple random proposer take it or leave it protocols are nbp while k double auctions k da are not we find that k das have equilibria that converge to perfect competition at a linear rate converge at a slower rate or even do not converge at all

productivity across industries and countries time series theory and evidence the authors examine whether convergence in aggregate productivity is also occurring at the industry level in fourteen oecd countries from 1970 to 1987 using both cross section and time series methods they find convergence in some sectors such as services however surprisingly the authors find that convergence does not hold for the manufacturing sector decomposing aggregate convergence into industry productivity gains and changing sectoral shares of output they find the service sector to be responsible for the bulk of cross country convergence to the united states the authors develop a new result on the asymptotic normality of panel unit root estimators to formally test within sector convergence copyright 1996 by mit press

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

credibility and exchange rate management in developing countries abstract the paper discusses the role of credibility factors in the conduct of exchange rate policy in developing countries the analysis is based on a simple framework in which policymakers are concerned about inflation and external competitiveness price setters in the nontradable sector of the economy engage in a strategic game against the authorities the model generates a devaluation bias which undermines the credibility of a fixed exchange rate the role of reputational factors signaling considerations and joining a currency union as possible solutions to this bias is examined

downstream management practices of transnational companies in institutionally vulnerable countries export and use of hazardous products analyses of social and environmental management in transnational product chains focus often upstream on suppliers in socially and institutionally vulnerable countries and these suppliers hazardous processes furthermore focus is on transnational companies responsibility when they source from such suppliers on the contrary not much focus has been on transnational companies downstream export of hazardous products to vulnerable countries and the product use in those countries the article uses pesticides as case of hazardous products and identifies mechanisms in the downstream social and environmental management of a danish pesticide company in vulnerable countries and especially in brazil the identified mechanisms are the transnational company s on going interpretation of the regulatory and ethical obligations for development and use of its hazardous products in vulnerable countries path dependency and path creation in the business strategy geographical and organisational coverage of the management systems and practices the willingness of the company to address social and institutional vulnerability in use countries and the roles of users and other actors in development and facilitation of more sustainable practices the mechanisms are discussed with reference to other analyses in the conclusion the mechanisms are presented as themes in future research and civil society organisations activities and as guidance in businesses development and assessment of more sustainable management practices the benefits of transnational research cooperation for this type of research are also discussed

efficiency of large private value auctions we consider discriminatory and uniform price auctions for multiple identical units of a good players have private values possibly asymmetrically distributed and for multiple units our setting allows for aggregate uncertainty about demand and supply in this setting equlibria generally will be inefficient despite this we show that such auctions become arbitrarily close to efficient if they are large and use this to derive an asymptotic characterization of revenue and bidding behavior

the essentiality of money in environments with centralized trade abstract lagos and wright 2005 introduced an influential model of monetary exchange in which trade alternates between centralized and decentralized markets and money is essential a limitation of their model and of the literature that follows is that they do not provide a microfoundation for the process of exchange in the centralized market in this paper we show that how one models exchange in the centralized market matters for the essentiality of money by describing the centralized market as a strategic market game and studying conditions under which money is essential

neighborhood effects and pro environmental behavior the case of italian separate waste collection abstract this paper investigates the relationship between neighborhood effects and pro environmental behavior working on 1999 2012 data on separate waste collection in italian provinces a spatial econometric analysis is carried out while a substantial stream of research focuses on recycling behavior determinants spatial dependence among different inter regional geographical areas has been less studied here empirical support is provided to the existence of spatial effects and heterogeneous behavior in the italian context it is found that waste collecting habits tend to be strongly influenced by proximity effects either in a positive or negative way moreover the paper tests the nature of such influence in terms of time effects by evaluating non contemporary spatial dependence good or bad pro environmental behavior as a persistent dynamic effect is found with the possibility of both self sustaining virtuous socio spatial dynamics and perverse lock in these results call for a rethinking of environmental policies and in particular for a stronger focus upon the social dimension of spatial diffusion phenomena in pro environmental behaviors

toward a strategic foundation for rational expectations equilibrium a step toward a strategic foundation for rational expectations equilibrium is taken by considering a double auction with n buyers and m sellers with interdependent values and affiliated private information if there are sufficiently many buyers and sellers and their bids are restricted to a sufficiently fine discrete set of prices then generically there is an equilibrium in nondecreasing bidding functions that is arbitrarily close to the unique fully revealing rational expectations equilibrium of the limit market with unrestricted bids and a continuum of agents in particular the large double auction equilibrium is almost efficient and almost fully aggregates the agents information

price formation in single call markets this paper reports a laboratory experiment designed to examine the price formation process in a simple market institution the single call market the experiment features random values and costs each period so each period generates a new price formation observation other design features are intended to enhance the predictive power of the bayesian nash equilibrium bne theory developed recently for this trading institution we find that the data support several qualitative implications of the bne but that subjects bid and ask behavior is not as responsive to changes in the pricing rule as the bne predictions bids and asks tend to reveal more of the underlying values and costs than predicted particularly when subjects are experienced nevertheless observed trading efficiency falls below the bne prediction the results offer more support for the bne when subjects compete against nash robot opponents a simple learning model accounts for several of the deviations from bne

markups in double auction markets abstract we study the continuous double auction cda market with simulated traders using three simple markup rules relative to analytic results obtained for markups in the simpler call market cm we find that uniform cda markups have a more complex and non monotonic impact on cda market outcomes such as price volume and efficiency the symmetric nash equilibrium markup in the cda is remarkably close to the most efficient markup in thick markets which may partially explain the mysterious efficiency for cda market

the demand for stocks an analysis of ipo auctions we analyze a unique dataset that includes the full demand schedules of 27 israeli ipos that were conducted as nondiscriminatory uniform price auctions to the best of our knowledge this is the first time the whole demand schedule for any asset is described the demand schedules are relatively flat around the auction clearing price the average elasticity is 27 the elasticity is low when the return distribution contains a large unique component we also find a significant average abnormal return of 4 5 on the first trading day and a positive correlation between the abnormal return and the elasticity of demand article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the effectiveness of english auctions abstract we study the performance of the english auction under different assumptions about the seller s degree of bayesian sophistication we define the effectiveness of an auction as the ratio between the expected revenue it generates for the seller and the expected valuation of the object to the bidder with the highest valuation total surplus we identify tight lower bounds on the effectiveness of the english auction for general private values environments and for private values environments where bidders valuations are non negatively correlated for example when the seller faces 12 bidders who the seller believes have non negatively correlated valuations whose expectations are at least as high as 60 of the maximal possible valuation an english auction with no reserve price generates an expected price that is more than 80 of the value of the object to the bidder with the highest valuation

the 2007 nobel memorial prize in mechanism design theory this paper provides an overview of mechanism design theory and explains the roles played by leonid hurwicz eric maskin and roger myerson in the development of this field

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

imperfect competition and efficiency in lemons markets this article studies the impact of competition on the degree of inefficiency in lemons markets more precisely we characterise the second best mechanism i e the optimal mechanism with private information in a stylised lemons market with finite numbers of buyers and sellers we then study the relationship between the degree of efficiency of the second best mechanism and market competitiveness a general message of our results is that increasing competition may not help lemons markets in some circumstances moreover increasing competition beyond a certain degree increases the distance between the first best and second best levels of efficiency

ex post analysis of economic impacts from wind power development in u s counties wind power development has surged in recent years in the united states policymakers and economic development practitioners to date have typically relied upon project level case studies or modeled input output estimates to assess the economic development impacts from wind power often focusing on potential local state wide or national employment or earnings impacts building on this literature we conduct an ex post econometric analysis of the county level economic development impacts of wind power installations from 2000 through 2008 in a large wind rich region in the country taking into account factors influencing wind turbine location we find an aggregate increase in county level personal income and employment of approximately 11 000 and 0 5 jobs per megawatt of wind power capacity installed over the sample period of 2000 to 2008 these estimates appear broadly consistent with modeled input output results and translate to a median increase in total county personal income and employment of 0 2 and 0 4 for counties with installed wind power over the same period

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

mobility and modality trends in us state personal income we examine the mobility and modality trends in us state per capita personal income and its components during the 1929 1999 period we find strong evidence of convergence for states but that the tendency towards convergence and the associated mobility within the distribution varies during the period and especially for the 1980s our analysis of convergence by income component suggests that transfer income contributes more to the observed convergence than does asset income we also note that distributional mobility need not be accompanied by high rank mobility and find that trends toward convergence in the us have tended to preserve rank ordering cet article cherche a examiner les tendances de mobilite et de modalitequant aux revenus personnels par tete et a ses composants aux etats unis pendant la periode qui va de 1929 a1999 il s avere de fortes preuves d une convergence entre etats qui varie au cours de la periode etudiee et qui va de pair avec une variation de la mobilite associee au sein de

is income inequality harmful for regional growth evidence from the european union this article examines the relationship between income inequality and economic growth in the regions of several european union countries over the period 1993 2002 using the information provided by the european community household panel taking into consideration the relevance of spatial effects in this context different versions of a spatial econometric model are estimated the results indicate that the degree of income dispersion is negatively associated with regional growth this finding is in fact robust to various alternative specifications including a number of additional explanatory variables such as initial per capita gdp the sectoral composition of economic activity human capital stock population density and market potential furthermore the observed negative correlation between income inequality and economic performance does not depend on the specific measure used to quantify the degree of income dispersion

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

convergence to perfect competition of a dynamic matching and bargaining market with two sided incomplete information and exogenous exit rate abstract consider a decentralized dynamic market with an infinite horizon and incomplete information in which buyers and sellers values for the traded good are private and independently drawn time is discrete each period has length and each unit of time a large number of new buyers and sellers enter the market within a period each buyer is matched with a seller and each seller is matched with zero one or more buyers every seller runs a first price auction with a reservation price and if trade occurs the seller and winning buyer exit with their realized utility traders who fail to trade either continue in the market to be rematched or exit at an exogenous rate we show that in all steady state perfect bayesian equilibria as approaches zero equilibrium prices converge to the walrasian price and realized allocations converge to the competitive allocation

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

modularity and greed in double auctions abstract designing double auctions is a complex problem especially when there are restrictions on the sets of buyers and sellers that may trade with one another the goal of this paper is to develop a modular approach to the design of double auctions by relating it to the exhaustively studied problem of designing one sided mechanisms with a single seller or alternatively a single buyer we consider several desirable properties of a double auction feasibility dominant strategy incentive compatibility the still stronger incentive constraints offered by a deferred acceptance implementation exact and approximate welfare maximization and budget balance for each of these properties we identify sufficient conditions on two one sided algorithms one for ranking the buyers one for ranking the sellers and on a method for their composition into trading pairs which guarantee the desired property of the double auction our framework also offers new insights into classic double auction designs such as the vcg and mcafee auctions with unit demand buyers and unit supply sellers

sunspots in the laboratory we show that extrinsic or nonfundamental uncertainty influences markets in a controlled environment this work provides the first direct evidence of sunspot equilibria these equilibria require a common understanding of the semantics of the sunspot variable and they appear to be sensitive to the flow of information sunspots always occur in a closed book call market but they happen only occasionally in a double auction where inframarginal bids and offers are observable

incentives in the probabilistic serial mechanism abstract the probabilistic serial mechanism bogomolnaia and moulin 2001 9 is ordinally efficient but not strategy proof we study incentives in the probabilistic serial mechanism for large assignment problems we establish that for a fixed set of object types and an agent with a given expected utility function if there are sufficiently many copies of each object type then reporting ordinal preferences truthfully is a weakly dominant strategy for the agent regardless of the number of other agents and their preferences the non manipulability and the ordinal efficiency of the probabilistic serial mechanism support its implementation instead of random serial dictatorship in large assignment problems

on the evolution of the world income distribution the post world war ii period has seen substantial changes in the distribution of gdp per worker around the world in the upper half of the distribution a number of countries have exhibited large increases in income relative to the richest countries in the bottom half several countries have seen incomes fall relative to the richest countries the net result of these changes is a movement in the shape of the world income distribution from something that looks like a normal distribution in 1960 to a bi modal twin peaks distribution in 1988 projecting these changes into the future suggests a number of interesting ndings first it seems likely that the united states will lose its position as the country with the highest level of gdp per worker second growth miracles have been more common in recent decades than growth disasters if these dynamics continue the future income distribution will involve far more rich countries and far fewer poor countries than currently observed

bilateral matching and bargaining with private information we study equilibria of a dynamic matching and bargaining game dmbg with two sided private information bilateral bargaining the model is a private information replica of mortensen and wright 2002 there are two kinds of frictions time

convergence clubs and endogenous growth recent data indicate a wide disparity in the growth performance of different nations such disparities have usually been taken to imply that there is to much catching up or convergence taking place using a modified version of the endogenous growth approach we show that convergence is occurring but in a non equalizing manner the world appears to be segmented into two mutually exclusive convergence clubs with the members of the richer club enjoying a real income per capita which is significantly higher than that enjoyed by those belonging to the poorer club copyright 1992 by oxford university press

on the trade off between deficit and inefficiency and the double auction with a fixed transaction fee in many trading environments any incentive compatible and individually rational market mechanism will be either inefficient or will run a deficit we prove that as the market size m gets large for any fixed surplus or deficit x m times the minimal absolute inefficiency converges to c x where c is essentially a quadratic function of textitx we introduce a new mechanism the double auction with a fixed transaction fee by choosing the size of the fee appropriately any level of deficit or surplus can be implemented and the resulting mechanisms achieve the above bound corollaries include an asymptotic version of the myerson satterthwaite impossibility theorem a description of the minimal subsidy required to implement the efficient trading rule a characterization of the minimal inefficiency obtainable with budget balanced market mechanisms recommendations on the optimal organization of trade and insights on the effects of taxation

income and employment disparities across european regions the role of national and spatial factors meliciani v 2006 income and employment disparities across european regions the role of national and spatial factors regional studies 40 75 91 the paper analyses the impact of trends in employment rates on income convergence across european regions looking at the evolution of entire distributions between 1988 and 1996 european regions have been characterized by a very slow process of income convergence across countries and by a lack of income convergence within countries while trends in labour productivity have contributed to income convergence trends in employment rates have had a diverging impact polarization in employment rates also appears to be the result of national factors and of the negative performance of objective 1 regions more than the consequence of the emergence of geographical clusters that go beyond national borders regional convergence unemployment spatial correlation non parametric estimation meliciani v 2006 les ecarts de revenu et d emploi a travers les regions d euro

the modified vickrey double auction abstract we modify w vickrey s 1961 j finance 16 8 37 mechanism for call markets by introducing the participation stage and study the efficiency properties of the modified mechanism we provide sufficient conditions under which the modified vickrey double auction achieves full efficiency in addition we prove that the modified vickrey double auction achieves asymptotic efficiency even when full efficiency cannot be achieved journal of economic literature classification numbers c72 d44 d82

us regional income convergence a spatial econometric perspective rey s j and montouri b d 1999 us regional income convergence a spatial econometric perspective reg studies 33 143 156 this study reconsiders the question of us regional economic income convergence from a spatial econometric perspective recently developed methods of exploratory spatial data analysis provide new insights on the geographical dynamics of us regional income growth patterns over the 1929 94 period strong patterns of both global and local spatial autocorrelation are found throughout the study period and the magnitude of global spatial autocorrelation is also found to exhibit strong temporal co movement with regional income dispersion a spatial econometric analysis of the familiar baumol specification reveals strong evidence of misspecification due to ignored spatial error dependence because of this dependence shocks originating in one state can spillover into surrounding states potentially complicating the transitional dynamics of the convergence process rey s j et montouri

a competitive distribution of auctions in this paper a competitive distribution of auctions is described for an economy consisting of an infinite number of buyers and sellers all of whom differ according to their valuation for the single indivisible object being traded a competitive distribution of auctions is such that no seller can improve his profits by deviating to any alternative direct mechanism it is shown that the competitive distribution of auctions will have the property that each buyer and seller s best reply is independent of his beliefs about the tastes of other buyers and sellers on the market the purpose of this paper is to provide an equilibrium for an economy in which sellers compete by offering different direct mechanisms to buyers no attempt is made to give a complete characterization of all possible equilibria rather we focus on one equilibrium in which the contracts that are offered by sellers in equilibrium and buyer s behaviour under these contracts are both independent of traders beliefs about one another the equilibrium illustrates one of the reasons why contracts that are employed in practice may not be as finely tuned to beliefs as the theory of mechanism design says that they should be the answer is simply that contracts are not offered in a vacuum sellers in the model studied in this paper need to compete with one another in order to attract buyers highly tuned mechanisms tend to extract buyer surplus in such an environment sellers are able to attract many buyers by offering to use cruder mechanisms that leave some surplus for buyers in this paper sellers are allowed to have different costs for the commodity that is being traded nonetheless the equilibrium for the limit economy in which there are infinitely many buyers and sellers is such that every seller offers a second price auction and publicizes a reserve price equal to his cost in a standard monopoly auction the optimal reserve price for the seller exceeds his cost by an amount that depends on his beliefs about buyers valuations myerson 1981 a seller who raises his reserve price has his profits affected in two distinct ways by raising his reserve price the seller makes it unprofitable for some buyer types to participate in his auction the seller therefore loses any surplus that he might have earned by trading with these buyers the buyers who still find it profitable to participate in the seller s auction will end up having to pay a higher price when they win because of this increase in the seller s reserve price this means that the seller will be able to extract a bit more surplus from buyers who continue to participate the seller raises the reserve price until the marginal cost associated with raising the reserve price is just equal to the marginal gain associated with the ability to extract more surplus from remaining buyers competition mitigates this argument since there is a limit to the amount of surplus that the seller can extract from remaining buyers before they decide that they should instead choose one of the alternative auctions that are being held on the market with

informational robustness of competitive equilibria abstract consider an exchange economy with complete information we perturb this economy by assuming that each agent s observation about the true state of the world is noisy the paper investigates the robustness of equilibria of the complete information economy with respect to incomplete information we provide conditions under which complete information equilibria are limits of equilibria of the economies with incomplete information as the noise in the signal converges to zero journal of economic literature classification numbers d51 d82

efficiency of large double auctions we consider large double auctions with private values values need be neither symmetric nor independent multiple units may be owned or desired participation may be stochastic we introduce a very mild notion of a little independence we prove that all nontrivial equilibria of auctions that satisfy this notion are asymptotically efficient for any alpha 0 inefficiency disappears at rate 1 n 2 alpha