the problem of multiple commons a market design approach abstract there are several locations each of which is endowed with a resource that is specific to that location each agent will go to a single location and harvest some of the resource there several agents may go to each location and thereby cause a congestion effect that is modeled in a general way we assign harvesting rights based on preferences alone though we later extend the model to accommodate private endowments of money we find the best allocation rule in the class of rules that are strategy proof anonymous and that satisfy a weak continuity property for a special class of preferences we also find an ascending mechanism similar to an auction that implements the rule the rule coincides with a special pseudo market equilibrium wherein agents buy their desired resource with tokens distributed by the social planner

position auctions with consumer search this paper examines a model in which advertisers bid for sponsored link positions on a search engine the value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about rm qualities and search optimally consumer search strategies equilibrium bidding and the welfare benets of position auctions are analyzed implications for reserve prices and a number of other auction design questions are discussed

truthfulness with value maximizing bidders on the limits of approximation in combinatorial markets abstract in some markets bidders want to maximize value subject to a budget constraint rather than payoff this is different to the quasilinear utility functions typically assumed in auction theory and leads to different strategies and outcomes we refer to bidders who maximize value as value bidders while simple single object auction formats are truthful standard multi object auction formats allow for manipulation it is straightforward to show that there cannot be a truthful and revenue maximizing deterministic auction mechanism with value bidders and general valuations approximation has been used as remedy to achieve truthfulness on other mechanism design problems and we study which approximation ratios we can get from truthful mechanisms we show that the approximation ratio that can be achieved with a deterministic and truthful approximation mechanism with n bidders cannot be higher than 1 n for general valuations for randomized approximation mechanisms there is a framework with a ratio that is tight

selection investment and women s relative wages over time in theory growing wage inequality within gender should cause women to invest more in their market productivity and should differentially pull able women into the workforce our paper uses heckman s two step estimator and identification at infinity on repeated current population survey cross sections to calculate relative wage series for women since 1970 that hold constant the composition of skills we find that selection into the female full time full year workforce shifted from negative in the 1970s to positive in the 1990s and that the majority of the apparent narrowing of the gender wage gap reflects changes in female workforce composition we find the same types of composition changes by measuring husbands wages and national longitudinal survey iq data as proxies for unobserved skills our findings help to explain why growing wage equality between genders coincided with growing inequality within gender

a new statecraft supranational entrepreneurs and international cooperation studies of international regimes law and negotiation as well as regional integration near universally conclude that political entrepreneurship by high officials of international organizations supranational entrepreneurship decisively influences the outcomes of multilateral negotiations studies of the european community ec have long stressed their informal agenda setting mediation and mobilization yet the studies underlying this interdisciplinary consensus tend to be anecdotal atheoretical and uncontrolled the study reported here derives and tests explicit hypotheses from general theories of political entrepreneurship and tests them across multiple cases the five most important ec negotiations while controlling for the actions of national governments two findings emerge first supranational entrepreneurship is generally redundant or futile governments can almost always efficiently act as their own entrepreneurs second rare cases of entrepreneurial success arise not when officials intervene to help overcome interstatecollective action problems as current theories presume but when they help overcome domestic or transnational collective action problems this suggests fundamental refinements in the core assumptions about transaction costs underlying general theories of international regimes law and negotiation

a multi item auction with budget constrained bidders and price controls we extend the multi item auction model of talman and yang 2008 and andersson et al 2015 by considering both unit demand bidders with budget constraints and price controls on bidding items due to these budget and price restrictions a walrasian equilibrium generally fails to exist to achieve efficiency we propose a rationed equilibrium whose allocation is in the core we also construct an ascending auction to find the proposed rationed equilibrium in pseudo polynomial time

a dynamic auction for differentiated items under price rigidities a number of heterogeneous items are to be sold to several bidders each bidder demands at most one item the price of each item is not completely flexible and is restricted to some admissible interval in such a market economy with price rigidities a walrasian equilibrium usually fails to exist to facilitate the allocation of items to the bidders we propose an ascending auction with rationing that yields a constrained walrasian equilibrium outcome the auctioneer starts with the lower bound price vector that specifies the lowest admissible price for each item and each bidder responds with a set of items demanded at those prices the auctioneer adjusts prices upwards for a minimal set of over demanded items and chooses randomly a winning bidder for any item if the item is demanded by several bidders and its price has reached its highest admissible price we prove that the auction finds a constrained walrasian equilibrium outcome in a finite number of steps

constrainedly fair job assignments under minimum wages a number of jobs are to be assigned to a greater number of workers while having to abide by the law of minimum wages firms must determine who should be assigned which job and at what salary in such situations fair envy free allocations usually fail to exist to cope with this situation this paper proposes a new concept of fairness called constrained fairness among the set of constrainedly fair allocations the so called constrainedly fair and minimal allocations are of particular interest the reason for this is that the salaries are not only compatible with the minimum wages they are also optimal from the standpoint of cost minimizing firms and the assignment of jobs is efficient from the viewpoint of workers a convergent dynamic procedure that identifies constrainedly fair and minimal allocations is proposed furthermore strategic properties of the mechanism are derived and two notions of efficiency are evaluated

a parametrization of the auction design space abstract we present an extensive breakdown of the auction design space that captures the essential similarities and differences of many auction mechanisms in a format more descriptive and useful than simple taxonomies this parametrization serves as an organizational framework in which to classify work within the field and uncovers parameter combinations corresponding to novel mechanisms the structured characterization of auction rules can be exploited for the modular design of configurable auction servers it also facilitates the communication of auction rules to software agents enabling the automation of flexible market based negotiation journal of economic literature classification numbers c70 d44

skill biased technological change and rising wage inequality some problems and puzzles the recent rise in wage inequality is usually attributed to skill biased technical change sbtc associated with new computer technologies we review the evidence for this hypothesis focusing on the implications of sbtc for overall wage inequality and for changes in wage differentials between groups a key problem for the sbtc hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology sbtc also fails to explain the evolution of other dimensions of wage inequality including the gender and racial wage gaps and the age gradient in the return to education

on supply constrained equilibria abstract the paper gives sufficient conditions for the existence of an equilibrium with price rigidities and quantity rationing where i demand is never rationed ii net trades of an a priori chosen numeraire are never rationed and iii supply is rationed only when relative prices are downward rigid

on minimal ascending auctions with payment discounts the literature on ascending combinatorial auctions yields conflicting insights regarding the possibility to implement the vickrey payoffs for general valuations we introduce the class of minimal ascending auctions a class which allows one to disconnect the final payments from the final bids but which prohibits the raising of the price vector of a provisionally winning bidder we first establish the impossibility of implementing the vickrey payoffs for general valuations second we propose a minimal ascending auction that yields a bidder optimal competitive equilibrium thanks to payment discounts

using first price auctions to sell heterogeneous licenses abstract this paper considers three alternative ways to sell heterogeneous licenses via a first price format when there is single unit demand it has been suggested that incorporating a first price element may bolster competition in this case klemperer paul d 2002 what really matters in auction design journal of economic perspectives 16 169 189 in a controlled laboratory setting we compare the performance of the simultaneous first price auction the sequential first price auction and the simultaneous descending auction with that of the simultaneous ascending auction the experiments involve several bidding environments of varying complexity we find that the simultaneous ascending auction achieves the highest levels of efficiency but also has drawbacks i its revenues are low and variable ii per license profits vary and iii the incidence of winner s curse outcomes is high seller s revenues are highest when the licenses are sold in a sequential first price auction in decreasing order of quality

auctions development and privatization efficient auctions with liquidity constrained buyers abstract we exhibit an efficient auction an auction for which the winner is the buyer with the highest valuation subject to the constraint that buyers may be budget or liquidity constrained

the institutional roots of american trade policy politics coalitions and international trade the 1934 reciprocal trade agreements act rtaa changed the structure of the making of u s trade policy and made possible a dramatic reduction in tariffs the authors demonstrate that the key institutional innovation in the rtaa was its mandate to lower tariffs through reciprocal agreements with foreign nations the expansion of exports under the rtaa enhanced political support for increasingly lower u s tariffs evidence that export interests were positively associated with congressional votes for free trade supports this view

internet advertising and the generalized second price auction selling billions of dollars worth of keywords we investigate the generalized second price gsp auction a new mechanism used by search engines to sell online advertising although gsp looks similar to the vickrey clarke groves vcg mechanism its properties are very different unlike the vcg mechanism gsp generally does not have an equilibrium in dominant strategies and truth telling is not an equilibrium of gsp to analyze the properties of gsp we describe the generalized english auction that corresponds to gsp and show that it has a unique equilibrium this is an ex post equilibrium with the same payoffs to all players as the dominant strategy equilibrium of vcg

estimating gender differences in access to jobs this paper proposes a new measure of gender differences in access to jobs based on a job assignment model this measure is the probability ratio of getting a job for a female and a male at each rank of the wage ladder we derive a nonparametric estimator of this access measure and estimate it for french full time executives aged 40 45 in the private sector our results show that the gender difference in the probability of getting a job increases along the wage ladder from 9 to 50 females thus have a significantly lower access to high paid jobs than to low paid jobs

the strategy structure of some coalition formation games in coalitional games with side payments the core predicts which coalitions form and how benefits are shared the predictions however run into difficulties if the core is empty or if some coalitions benefit from not blocking truthfully these difficulties are analyzed in games in which an a priori given collection of coalitions can form as the collection of pairs of buyer seller in an assignment game the incentive properties of the core and of its selections are investigated in function of the collection furthermore the relationships with vickrey clarke groves mechanisms are drawn

online ad auctions i describe how search engines sell ad space using an auction i analyze advertiser behavior in this context using elementary price theory and derive a simple way to estimate the producer surplus generated by online search advertising it appears that the estimated value of online advertising tends to be between 2 and 2 3 times advertising expenditures jel d44 auctions d21 firm behavior

robust auctions for revenue via enhanced competition in robust auctions for revenue via enhanced competition t roughgarden i talgam cohen and q yan revisit the classic bulow klemperer result this result compares the revenues of two well know

double implementation in a market for indivisible goods with a price constraint i consider the problem of assigning indivisible objects to agents in which each agent pays a price for his object and all prices sum to a given constant the objective is to select an assignment price pair that is envy free with respect to the agents true preferences i propose a simple mechanism whereby agents announce valuations for all objects and an envy free allocation is selected with respect to these announced preferences i prove that the proposed mechanism implements both in nash and strong nash equilibrium the set of true envy free allocations

a theory of jump bidding in ascending auctions abstract jump bidding is a commonly observed phenomenon that involves bidders in ascending auctions submitting bids higher than required by the auctioneer such behavior is typically explained as due to irrationality or to bidders signaling their value we present field data that suggests such explanations are unsatisfactory and construct an alternative model in which jump bidding occurs due to strategic concerns and impatience we go on to examine the impact of jump bidding on the outcome of ascending auctions in an attempt to resolve some policy disputes in the design of ascending auctions

do regimes matter epistemic communities and mediterranean pollution control international regimes have received increasing attention in the literature on international relations however little attention has been systematically paid to how compliance with them has been achieved an analysis of the mediterranean action plan a coordinated effort to protect the mediterranean sea from pollution shows that this regime actually served to empower a group of experts members of an epistemic community who were then able to redirect their governments toward the pursuit of new objectives acting in an effective transnational coalition these new actors contributed to the development of convergent state policies in compliance with the regime and were also effective in promoting stronger and broader rules for pollution control this suggests that in addition to providing a form of order in an anarchic international political system regimes may also contribute to governmental learning and influence patterns of behavior by empowering new groups who are able to direct their governments toward new ends

decentralized matching markets with endogenous salaries abstract in a shapley shubik assignment problem with a supermodular output matrix we consider games in which each firm makes a take it or leave it salary offer to one applicant and a match is made only when the offer is accepted by her we consider both one shot and multistage games in either game we show that there can be many equilibrium salary vectors which are higher or lower than the minimum competitive salary vector if we exclude artificial equilibria applicants equilibrium salary vectors are bounded above by the minimal competitive salary vector while firms equilibrium payoff vectors are bounded below by the payoff vector under the minimum competitive salary vector this suggests that adopting the minimum competitive salary vector as the equilibrium outcome in decentralized markets does not have a strong justification

vickrey dutch procurement auction for multiple items we consider a setting where there is a manufacturer who wants to procure multiple items from a set of suppliers each of whom can supply one or more of these items bundles we design an ascending price auction for such a setting which implements the vickrey clarke groves outcome and truthful bidding is an ex post nash equilibrium our auction maintains non linear and non anonymous prices throughout the auction this auction has a simple price adjustment step and is easy to implement in practice as offshoots of this auction we also suggest other simple auctions in which truthful bidding is not an equilibrium by suppliers which may be suitable where incentives to suppliers are not a big concern computer simulations of our auction show that it is scalable for the multi unit case and has better information revelation properties than its descending auction counterpart

increasing earnings inequality and the gender pay gap in canada prospects for convergence this paper retraces the evolution of canadian women s labour force participation and of the gender earnings ratio across the generations to understand better the prospects for gender convergence in pay using data from the public use labour force surveys lfs and administrative annual earnings data from the longitudinal worker files lwf the paper assesses the role of increasing top earnings inequality in the persistence of the gender pay gap having identified a growing role for the under representation of women among top earners the paper then performs an evaluation and critical analysis of existing gender equality policies centred on horizontal occupational gender segregation and discusses alternative policies for the future

strategy proof house allocation with price restrictions abstract this paper considers a house allocation problem with no initial ownership and where prices are bounded from below and above by exogenously given price restrictions this type of housing market contains e g the assignment market and the student placement problem as special cases a mechanism called the minimal rpe mechanism is defined and two main results are obtained first it is demonstrated that the mechanism is manipulable at some profile in the full preference domain r second it is proved that there is a subset r r of the full domain containing almost all profiles in r such that the minimal rpe mechanism is strategy proof in that subset

an algorithm for identifying fair and optimal allocations the concept of a fair and optimal allocation was recently introduced by sun and yang sun n yang z 2003 a general strategy proof fair allocation mechanism economics letters 81 73 79 this note states some basic properties of fair and optimal allocations and provides a simple algorithm for identifying them c 2007 elsevier b v all fights reserved

are women s wage gains men s losses a distributional test department of economics university of british columbia vancouver bc v6t 1z1 and department of economics crde cirano universite de montreal montreal pq h3c 3j7 lemieux is also affiliated with the nber we thank paul beaudry richard blundell richard freeman and robert haveman for helpful comments and discussions we gratefully acknowledge financial support from the social sciences and humanities council of canada and from fcar quebec 1 the gender wage ratio and the 90 50 wage ratio for men are calculated from the current population survey cps data provided by epi http www epinet org the 1980 s trends in the gender gap emerged from average real increases of 0 5 percent per year in women s median wages and average real declines of 1 percent per year in men s median wages

approximation in mechanism design with interdependent values abstract this paper studies the revenue maximization problem in environments wherein buyers have interdependent values and correlated types we show that 1 when the system of feasible sets is a matroid and buyer valuations satisfy a single crossing condition the generalized vickrey clarke groves mechanisms with lazy reserves vcg l are ex post incentive compatible and ex post individually rational 2 if in addition the valuation distribution satisfies a generalized monotone hazard rate condition the vcg l mechanism with conditional monopoly reserves is approximately optimal then we construct an ascending auction that implements the truth telling equilibrium of a vcg l mechanism in ex post equilibrium finally we discuss the connection between the vcg l mechanisms and greedy algorithms studied in lehmann et al 2002 and deferred acceptance auctions studied in milgrom and segal 2014 and the impact of competition by proving a bulow and klemperer 1996 type result

financial interdependence and the state international monetary relations at century s end as the twentieth century draws to a close one can find sharply contrasting views among leading scholars on almost every key issue in positive international political economy how strong are international as opposed to domestic influences on policy how important are issues of national security high politics versus economic considerations low politics what role do institutions international and domestic play in influencing and constraining the behavior of governments why is international cooperation rare but not unheard of the list goes on and on

elicitation of honest preferences for the assignment of individuals to positions the problem of eliciting honest preferences from individuals who must be assigned to a set of positions is considered individuals know that they will be charged for the positions to which they are assigned a set of prices that provide no incentive for the individual to misrepresent his preferences is suggested it is shown that these prices constitute an element of the optimal solution to the dual of a linear programming assignment problem both the optimal allocation and the prices to be charged can be derived by solving two linear programming problems once preferences have been elicited the procedure can usefully be viewed as a simulation of a competitive market under conditions where such a market cannot be expected to function well it results in an efficient allocation where all resources are valued at their opportunity costs and consumer surplus is maximized its outcome thus has the desirable properties of competitive market equilibria

european union energy policy integration a case of european commission policy entrepreneurship and increasing supranationalism focusing on gas this article explores the role of the european commission in the process of european union energy security policy development and the extent to which the policy area is becoming increasingly supranational situating the article within the literature on agenda setting and framing it is argued that a policy window was opened as a result of enlargement to include more energy import dependent states a trend of increasing energy imports and prices and gas supply disruptions from the mid 2000s the commission contributed to a shift in political norms successfully framing import dependency as a problem requiring an eu level solution based on the institution s pre existing preferences for a diversified energy supply and internal energy market whilst member states retain significant sovereignty the commission has achieved since 2006 creeping competencies in the internal and to a lesser extent external dimensions of eu energy policy

revisiting the single european act and the common wisdom on globalization the european program of liberalization launched by the single european act sea of 1987 is commonly seen as a powerful instance of globalization trends of economic integration liberalization and international institution building this article revisits the origins of the sea to argue that the extent and success of its liberalizing program depended on a causally distinct push for european institutional reform a retracing of concrete political patterns behind the sea greatly strengthens broader statistical and theoretical challenges to the notion of strong universal trends of globalization

ascending price vickrey auctions abstract we show that an ascending price auction for multiple units of a homogeneous object proposed by ausubel i raises prices for packages until they reach those nonlinear and non anonymous market clearing prices at which bidders get their marginal products and ii the auction is a primal dual algorithm applied to an appropriate linear programming formulation in which the dual solution yields those same market clearing prices we emphasize the similarities with efficient incentive compatible ascending price auctions to implement vickrey payments when there is a single object or when objects are heterogeneous but each buyer does not desire more than one unit a potential benefit of these common threads is that it helps to establish the principles upon which vickrey payments may be implemented through decentralized incentive compatible procedures

an efficient dynamic auction for heterogeneous commodities this paper proposes a new dynamic design for auctioning multiple heterogeneous commodities generalizing earlier work that treated identical objects an auctioneer wishes to allocate one or more units of each of k heterogeneous commodities to n bidders the auctioneer announces a vector of current prices bidders report back quantities demanded at these prices and the auctioneer adjusts the prices units are credited to bidders at the current prices as their opponents demands decline and the process continues until every commodity market clears bidders rather than being required to behave as price takers are permitted to strategically exercise their market power nevertheless with pure private values the proposed auction yields walrasian equilibrium prices an efficient outcome results as from a vickrey clarke groves mechanism but bidders are only required to evaluate their demands along a one dimensional path of prices rather than reporting their utilities over the entire k dimensional consumption set the auction is also more transparent and potentially simpler for bidders to understand and has the advantage of assuring the privacy of the upper portions of bidders demands theoretically the new auction provides a new foundation for convergence to walrasian equilibrium in an exchange economy practically it provides an efficient method for simultaneously auctioning two or more related types of securities for example three month and six month treasury bills it is also potentially useful for auctioning multiple types of communications spectrum for example licenses for paired and unpaired spectrum

joint bidding in the name your own price channel a strategic analysis in this paper we study the name your own price nyop channel we examine theoretically and empirically whether asking consumers to place a joint bid for multiple items rather than bid one item at a time as practiced today can increase nyop retailers profits relatedly we also examine whether allowing consumers to self select whether to place a joint bid or itemwise bids increases retailers profits and consumers surplus we construct a dynamic model that incorporates both demand uncertainty and supply uncertainty to address these issues our theoretical analysis identifies the conditions under which joint bidding can increase both nyop retailers profits and consumers surplus we find that some consumers might bid more for the very same items when they place joint bids the increase in bid amount is related to the fact that joint bidding reduces the chance of mismatch between nyop retailers costs and consumer bids we conducted a laboratory study to assess the descriptive validity of some of the

the european constitutional settlement this paper argues first that a synthesis of the theories of endogenous policy formation non coercive interstate bargaining theo ry and international regime theory provides a plausible account of the path of european integration with little role for expl anations stressing geopolitical or ideological factors international mediation or political entrepreneurship moreover these theories which embrace economic fundamentals as driving factors help explain the sequencing of the european union especially in regard to successive enlar gements however the paper concludes that the process of european integration appears to have reached an institutiona l platea u for which a constitutiona l compromise appears to be the only plausible equilibrium

a theory of buyer seller networks this paper introduces a new model of exchange networks rather than markets of buyers and sellers it begins with the empirically motivated premise that a buyer and seller must have a relationship a link to exchange goods networks buyers sellers and the pattern of links connecting them are common exchange environments this paper develops a methodology to study network structures and explains why agents may form networks in a model that captures characteristics of a variety of industries the paper shows that buyers and sellers acting strategically in their own self interests can form the network structures that maximize overall welfare

bargaining enforcement and international cooperation neoliberals and their neorealist critics have debated the relative importance of two main obstacles to international cooperation problems of cheating and enforcement and problems of relative gains by contrast i argue that problems of international cooperation have a common strategic structure in which a third distinct obstacle plays a crucial role almost regardless of the issue area states must first resolve the bargaining problem of agreeing on terms before they can implement and begin to enforce an agreement furthermore the bargaining and enforcement problems interact using a game model i show that if states must bargain to determine the deal to be enforced the shadow of the future cuts two ways a high expectation of continued interactions may make enforcing the agreement easier but it can also give states an incentive to bargain harder delaying agreement in hopes of getting a better deal empirical evidence from trade and arms control negotiations suggests that this mechanism may help to explain the costly standoffs that are often observed in international politics and are problematic for received neoliberal theories

on vickrey type auction procedures abstract although a vickrey type auction provides a dominant strategy for every buyer bidder even in a multi item setting a seller can manipulate the auction this paper attempts to show that the manipulation can be avoided by suitably modifying the initial price vector

the demand for international regimes international regimes can be understood as results of rational behavior by the actors principally states that create them regimes are demanded in part because they facilitate the making of agreements by providing information and reducing transactions costs in world politics increased interdependence among issues greater issue density will lead to increased demand for regimes insofar as regimes succeed in providing high quality information through such processes as the construction of generally accepted norms or the development of transgovernmental relations they create demand for their own continuance even if the structural conditions such as hegemony under which they were first supplied change analysis of the demand for international regimes thus helps us to understand lags between structural change and regime change as well as to assess the significance of transgovernmental policy networks several assertions of structural theory seem problematic in light of this analysis hegemony may not be a necessary condition for stable international regimes past patterns of institutionalized cooperation may be able to compensate to some extent for increasing fragmentation of power

supply constrained equilibria in economies with indexed prices abstract in an exchange economy prices are rigid and the prices are restricted by index functions the indexes can be of a general type and can be different for each commodity indexed prices can appear in other indexes also considered are restrictions in terms of a general price index existence of a dreze equilibrium and particularly a supply constrained dreze equilibrium is proved the system of indexes must be solvable in terms of unconstrained prices and for the unconstrained commodities a monotonicity condition must hold

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

unemployment equilibrium in an economy with linked prices wage inflexibility has been widely regarded in modern writing as a cause of unemployment almost any keynesian or non walrasian equilibrium which involves equilibrium excess supplies also contain some form of wage or price inflexibility yet the micro mechanism of wage inflexibility its causes and form remains somewhat a mystery in this paper we study the allocation of resources in an economy in which prices of some goods or services are linked to other goods or services this is not wage rigidity in the traditional sense but it is a form of rigidity which is widely observed following the recent literature on non walrasian equilibrium see for example dreze 1975 barro and grossman 197 l grandmont and laroque 1976 malinvaud 1977 and many others one would expect the allocation to be attained via a set of quantity constraints on net trades we show in this paper however that the allocation mechanism in the economy will not require a general set of limitations on excess supplies and excess demands but rather will tend to have the following two properties

on ascending vickrey auctions for heterogeneous objects abstract we construct an ascending auction for heterogeneous objects by applying a primal dual algorithm to a linear program that represents the efficient allocation problem for this setting the auction assigns personalized prices to bundles and asks bidders to report their preferred bundles in each round a bidder s prices are increased when he belongs to a minimally undersupplied set of bidders this concept generalizes the notion of overdemanded sets of objects introduced by demange gale and sotomayor for the one to one assignment problem under a submodularity condition the auction implements the vickrey clarke groves outcome we show that this type of condition is somewhat necessary to do so when classifying the ascending auction literature in terms of their underlying algorithms our auction fills a gap in that literature we relate our results to various ascending auctions in the literature

sequential rules for house allocation with price restrictions this paper considers a housing market with price restrictions on such markets the existence of a unique minimum rationing equilibrium price vector has been established for each preference profile on a general preference domain that contains almost all preference profiles this vector can be used as a key ingredient in a direct and strategy proof allocation mechanism the main contribution of this paper is to provide two price sequences one with increasing prices and one with decreasing prices that both terminate to a minimal rationing equilibrium price vector in a finite number of steps these sequences are demonstrated to play key roles in an english auction and a dutch auction respectively for the considered housing market with price restrictions less

non cooperative bargaining theory an introduction the paper provides an informal introduction to some of the main themes of the recent literature on non cooperative or sequential bargaining models it focuses in particular on the relationship between the new approach and the traditional axiomatic approach exemplified by nash bargaining theory it illustrates the new insights offered by the non cooperative approach by reference to a detailed analysis of the manner in which the presence of an outside option available to one of the parties will affect the negotiated outcome finally the difficulties which arise in extending this analysis to two person bargaining with incomplete information and to n person bargaining are discussed this is a revised version of the fourth review of economic studies lecture presented in april 1985 at the joint meeting of the association of university teachers of economics and the royal economic society held in oxford the choice of lecturer is made by a panel whose members are currently professors hahn mirrlees and nobay and the paper is refereed in the usual way this paper aims to provide an informal and elementary introduction to an approach to bargaining which has received a great deal of attention over the past few years the approach involves writing down some particular sequence of moves offers and replies to be made over time in the course of negotiations and then looking for a non cooperative equilibrium in the game thus specified in practice a perfect equilibrium or in games of incomplete information a sequential equilibrium while the approach appears at first sight to be very different in spirit from the traditional axiomatic approach in which a bargaining solution is specified by appealing to a number of general requirements which are deemed appropriate on the basis of some a priori considerations the two approaches are in fact complementary while the

auction protocols for decentralized scheduling decentralized scheduling is the problem of allocating resources to alternative possible uses over time where competing uses are represented by autonomous agents market mechanisms use prices derived through distributing bidding protocols to determine schedules we investigate the existence of equilibrium prices for some general classes of scheduling problems the quality of equilibrium solutions and the behavior of an ascending auction mechanism and bidding protocol to remedy the potential nonexistence of price equilibria due to complementarities in preference we introduce additional markets in combinations of basic goods finally we consider direct revelation mechanisms and compare to the market based approach journal of economic literature classification numbers c62 c70 d44

ascending price vickrey auctions for general valuations ascending price auctions typically involve a single price path with buyers paying their final bid price using this traditional definition no ascending price auction can achieve the vickrey clarke groves vcg outcome for general private valuations in the combinatorial auction setting we relax this definition by allowing discounts to buyers from the final price of the auction or alternatively calculating the discounts dynamically during the auction while still maintaining a single price path using a notion called universal competitive equilibrium prices shown to be necessary and sufficient to achieve the vcg outcome using ascending price auctions we define a broad class of ascending price combinatorial auctions in which truthful bidding by buyers is an ex post nash equilibrium any auction in this class achieves the vcg outcome and ex post efficiency for general valuations we define two specific auctions in this class by generalizing two known auctions in the literature 11 24

a simple selling and buying procedure abstract for the assignment game we analyze the following mechanism sellers simultaneously fix their prices first then buyers sequentially decide which object to buy also each buyer may report his or her indifferences along with the previous buyers indifferences to the following buyer the first phase determines the potential prices while the second phase determines the actual matching reporting truthfully the indifferences is always a dominant strategy for the buyers moreover when buyers state their true indifferences the subgame perfect equilibria outcomes of the mechanism correspond to the maximum equilibrium price vector together with optimal matchings journal of economic literature classification numbers c78 d78

an efficient ascending bid auction for multiple objects when bidders exhibit multi unit demands standard auction methods generally yield inefficient outcomes this article proposes a new ascending bid auction for homogeneous goods such as treasury bills or telecommunications spectrum the auctioneer announces a price and bidders respond with quantities items are awarded at the current price whenever they are clinched and the price is incremented until the market clears with private values this dynamic auction yields the same outcome as the sealed bid vickrey auction but has advantages of simplicity and privacy preservation with interdependent values this auction may retain efficiency whereas the vickrey auction suffers from a generalized winner s curse

changes in the structure of earnings during the polish transition abstract we document changes in the structure of earnings during the economic transition in poland we find that inequality in labor earnings increased substantially from 1988 to 1996 a common view is that the reallocation of workers from a public sector with a compressed wage distribution to a private sector with much higher wage inequality accounts for the bulk of increased earnings inequality during transition see e g the models of aghion and commander 1999 aghion philippe commander simon 1999 on the dynamics of inequality in the transition economics of transition 7 275 2898 and commander and tolstopiatenko 1998 commander simon tolstopiatenko andrei 1998 the role of unemployment and restructuring in the transition in commander simon ed enterprise restructuring and unemployment in models of transition the world bank washington pp 169 192 however our decomposition of the sources of the increase in inequality suggests that this compositional effect accounts for only 39 of the increase fully 52 of the increase is due to the increase in the variance of wages within sectors that is earnings inequality within both the private and public sectors grew substantially and by similar amounts this is consistent with prior work suggesting that even state owned enterprises in poland moved towards competitive wage setting as they restructured see e g pinto et al 1993 pinto brian belka marek krajewski stefan 1993 transforming state enterprises in poland evidence on adjustment by manufacturing firms brookings papers on economic activity 213 70 commander and dhar 1998 commander simon dhar sumana 1998 enterprises in the polish transition in simon commander ed enterprise restructuring and unemployment in models of transition the world bank washington pp 109 142 a substantial part of the increase in earnings inequality was between group due largely to increased education premiums however changes in inequality within education experience gender groups account for about 60 percent of the increase in overall earnings inequality the increases in within group inequality were very different across skill groups with much larger increases for highly educated workers these patterns hold in both the private and public sectors although increases in education premiums were somewhat greater in the private sector

does the labour supply of wives respond to husbands wages canadian evidence from micro data and grouped data using micro data and grouped data we assess the extent to which canadian wives adjusted their labour supply in response to changes in husbands wages during the period 1980 2000 grouped data parameters based on weighted least squares and the unbiased error in variables estimator developed by devereux 2004 2007a b yield cross wage elasticities that are substantially higher in absolute value than those derived from ols regressions run on micro data both grouping estimators indicate that the labour supply of canadian wives responded strongly to changes in husbands wages during the 1980s for the 1990s our estimates of wives cross wage elasticity display greater dispersion a l aide de micro donnees et de donnees groupees on etablit jusqu a quel point les epouses canadiennes ont ajuste leur offre de travail en reponse aux changements dans les salaires de leurs epoux au cours de la periode 1980 2000 les parametres pour les donnees groupees derives par la methode des moindres carres ponderes et de l estimateur developpe par devereux 2004 2007a b engendrent des elasticites croisees qui sont substantiellement plus grandes en termes absolus que ceux derives par la methode des moindres carres ordinaires en utilisant des micro donnees les deux estimations montrent que l offre de travail des epouses canadiennes a repondu fortement aux changements dans les salaires des epoux au cours des annees 80 pour les annees 90 les evaluations des elasticites croisees des salaires montrent une plus grande dispersion

explaining institutional change policy areas outside options and the bretton woods institutions i propose and test a theoretical framework that explains institutional change in international relations like firms in markets international institutions are affected by the underlying characteristics of their policy areas some policy areas are prone to produce institutions facing relatively little competition limiting the outside options of member states and impeding redistributive change in comparison institutions facing severe competition will quickly reflect changes in underlying state interests and power to test the theory empirically i exploit common features of the bretton woods institutions the international monetary fund and world bank to isolate the effect of variation in policy area characteristics the empirical tests show that despite having identical membership and internal rules bargaining outcomes in the bretton woods institutions have diverged sharply and in accordance with the theory

male wage inequality and marital dissolution is there a link after almost a century long pattern of rising marital instability divorce rates leveled off in 1980 and have been declining ever since the timing of deceleration and decline in the rates of marital disruption interestingly coincides with a period of substantial growth in wage inequality this paper establishes a connection between the two phenomena and explores potential explanations for the underlying link using individual data on female marital histories in a duration analysis framework combined with regional and temporal variation in the pattern of male wage dispersion i show that inequality has a significant stabilizing effect on the marital relationship quantitatively increases in male wage dispersion can roughly explain up to 30 of the fall in the mean separation probability between 1979 and 1990 several plausible explanations for this relationship are assessed changes in spousal labor supplies female wage inequality income uncertainty social capital as well as a hypothesis of on the marriage search the results are most supportive of the search interpretation no strong quantitative support was found for the remaining mechanisms

bargaining in stationary networks we study an infinite horizon game in which pairs of players con nected in a network are randomly matched to bargain players who reach agreement are replaced by new players at the same positions in the network we show that all equilibria are payoff equivalent the payoffs and the set of agreement links converge as players become patient several new concepts mutually estranged sets partners and shortage ratios provide insights into the relative strengths of the positions in the network we develop a procedure to deter mine the limit equilibrium payoffs for all players characterizations of equitable and nondiscriminatory networks are also obtained jel c78 d85 competitive equilibrium theory assumes large and anonymous markets in which every buyer can trade with every seller underlying these assumptions are standard goods and services that may be traded at low transaction costs by agents who are not in specific relationships with one another however in many markets goods and services are heterogeneous e g cars apartments or need to be tailored to particular needs e g manufacturing inputs technical support furthermore trad ing opportunities may depend on transportation costs social relationships infor mation advertising trust technological compatibility joint business opportunities free trade agreements etc in such cases it is natural to model the market using a network where only pairs of connected agents may engage in exchange new theories are needed to explore the influence of the network structure on market outcomes many questions arise how does an agent s position in the net work determine his bargaining power and the local prices he faces who trades with whom and on what terms when are prices uniform in the network one possible conjecture is that an agent s bargaining power is determined by his relative number of connections in the network however this simple theory is implausible consider the network of four sellers located at the top nodes and nine buyers located at the bottom nodes depicted in figure 1 assume that each seller supplies one unit of a homogeneous indivisible good each buyer demands one unit of the good and all buyers have identical values for the good the buyer located in the middle has the largest number of links in the network as he is connected to each

the english auction with differentiated commodities abstract we study economies with indivisibilities that satisfy the gross substitutes gs condition we define an excess demand set with the property that increasing the prices of all goods in excess demand eventually leads to the smallest walrasian prices this procedure is a generalization of the auction studied by g demange d gale and m j sotomayor polit econ 94 1986 863 872 in our auction truthful revelation of demand is a perfect bayesian equilibrium if the smallest walrasian prices correspond to the vickrey clarke groves payments however no dynamic auction can reveal sufficient information to implement the vickrey mechanism if all gs preferences are allowed journal of economic literature classification numbers d4 d44 d5 d51

the politics of international regime formation managing natural resources and the environment why do actors in international society succeed in forming institutional arrangements or regimes to cope with some transboundary problems but fail to do so in connection with other seemingly similar problems this article employs a threefold strategy to make progress toward answering this question the first section prepares the ground by identifying and critiquing the principal models embedded in the existing literature on regime formation and the second section articulates an alternative model called institutional bargaining the third section employs this alternative model to derive some hypotheses about the determinants of success in institutional bargaining and uses these hypotheses in a preliminary way to illuminate the process of regime formation in international society to lend empirical content to the argument the article focuses throughout on problems relating to natural resources and the environment

competitive equilibria in two sided matching markets with general utility functions we present an exact characterization of utilities in competitive equilibria of two sided matching markets in which the utility of each agent depends on the choice of partner and the terms of the partnership potentially including monetary transfer examples of such markets include sellers and buyers or jobs and workers demange and gale showed that the set of competitive equilibria in this type of market forms a complete lattice with each extreme point of the lattice representing an equilibrium with the highest utilities for the agents on one side and the lowest utilities for the agents on the opposite side our characterization is based on establishing a connection between the competitive equilibria of a market and the competitive equilibria of certain strict subsets of that market each obtained by removing exactly one agent this characterization captures the effect of competition when agents are added to the market or removed from the market it gives a precise procedure for constructing competitive eq

how to efficiently allocate houses under price controls we examine a housing market with price controls and show how the allocation problem can be solved through a price system we demonstrate that the auction of talman and yang 2008 always generates a core allocation thus resulting in a pareto efficient and stable outcome

rental harmony with roommates abstract we prove existence of envy free allocations in markets with heterogenous indivisible goods and money when a given quantity is supplied from each of the goods and agents have unit demands we depart from most of the previous literature by allowing agents preferences over the goods to depend on the entire vector of prices we then show how our theorem may be applied in two related problems existence of envy free allocations in a version of the cake cutting problem and existence of equilibrium in an exchange economy with indivisible goods and money our proof uses shapley s k k m s theorem and hall s marriage lemma

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

the exposure problem and market design markets have an exposure problem when getting to the optimal allocation requires a sequence of transactions which if started but not completed leaves at least one trader with losses we use laboratory experiments to evaluate the effect of the exposure problem on alternative market mechanisms the continuous double auction performs poorly efficiency is only 20 when exposure is high and 55 when it is low a package market effectively eliminates the exposure problem in low and high exposure treatments efficiency is 82 and 89 respectively building on stability notions from matching theory we introduce the concept of mechanism stability a model of trade that combines mechanism stability with noisy best responses and imperfect foresight explains the difference in market performance finally decentralized bargaining with contingent contracts performs well with perfect information and communication but not in the more realistic case when traders preferences are privately known

the wage distribution in a model of the assignment of skills to jobs this paper discusses a general equilibrium model of the assignment of heterogeneous workers to heterogeneous jobs both jobs and workers are measured along a continuous one dimensional scale the c

information and the coase theorem abstract some economists think the coase theorem implies a lot about the proper scope of government intervention in the economy and about the welfare consequences of laissez faire others see it as a mere tautology that if people negotiate efficiently then every outcome will be efficient the coase theorem is important only if we believe that efficient negotiation is likely of course we can attribute inefficiencies to bargaining imperfection but it may not be useful to do so such attitudes sometimes seem to depend more on ideology than on reason this article gives one economist s reasoned view it discusses the coase theorem as a decentralization result and why decentralization results are interesting it considers mechanism design for revealing private information and describes the problems of centralization should the coase theorem should be viewed as a second best result property rights are more efficient than some reasonable alternative does the coase theorem recommend an institution or make

multi item auctions a collection of items is to be distributed among several bidders and each bidder is to receive at most one item assuming that the bidders place some monetary value on each of the items it has been shown that there is a unique vector of equilibrium prices that is optimal in a suitable sense for the bidders in this paper we describe two dynamic auction mechanisms one achieves this equilibrium and the other approximates it to any desired degree of accuracy

economic engineering and the design of matching markets the contributions of alvin e roth alvin roth s research on and design of new economic systems has had a wide and large impact on human welfare from the matching of residents to medical programs to the assignment of students to schools to the manner in which kidneys are allocated to patients needing transplants this article discusses his important contributions to the understanding and improvement of matching markets highlighting roth s key roles in some of the most prominent successes of market design and the ascension of economic engineering

multi item vickrey english dutch auctions abstract assuming that bidders wish to acquire at most one item this paper defines a polynomial time multi item auction that locates the vcg prices in a finite number of iterations for any given starting prices this auction is called the vickrey english dutch auction and it contains the vickrey english auction sankaran j k 1994 on a dynamic auction mechanism for a bilateral assignment problem math soc sci 28 143 150 and the vickrey dutch auction mishra d parkes d 2009 multi item vickrey dutch auctions games econ behav 66 326 347 as special cases by means of numerical experiments it is showed that when the auctioneer knows the bidders value distributions the vickrey english dutch auction is weakly faster than the vickrey english auction and the vickrey dutch auction in 89 percent and 99 percent respectively of the investigated problems a greedy version of the vickrey english dutch auction is demonstrated to perform even better in the simulation studies

online ascending auctions for gradually expiring items abstract we consider dynamic auction mechanisms for the allocation of multiple items items are identical but have different expiration times and each item must be allocated before it expires buyers are of dynamic nature and arrive and depart over time our goal is to design mechanisms that maximize the social welfare we begin by showing that dominant strategy incentive compatibility cannot be used in this case since any such auction cannot obtain any constant fraction of the optimal social welfare we then design two auctions that perform well under a wide class of semi myopic strategies for every combination of such strategies the auction is associated with a different algorithm or allocation rule and so we have a family of semi myopic algorithms we show that any algorithm in this family obtains at least 1 3 of the optimal social welfare we also provide some game theoretic justification for acting in a semi myopic way we suggest a new notion of set nash equilibrium where we cannot pinpoint a single best response strategy but rather only a set to which best response strategies belong we show that our auctions have a set nash equilibrium which is all semi myopic

the effect of male wage inequality on female age at first marriage a model in which women search for husbands characterized by their wages predicts increasing within group male wage inequality raises the expected value of continued marital search and so lowers female marriage propensities using 1970 1980 and 1990 census data i test this hypothesis within geographically racially and educationally defined marriage markets the estimates suggest rising male wage inequality accounted for 7 to 18 of the decline in the propensity to marry between 1970 and 1990 for white women and more educated black women growing wage inequality appears to have had little effect on the marriage behavior of less educated black women

swimming upstream trends in the gender wage differential in the 1980s using michigan panel study of income dynamics data for 1979 and 1988 we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low wage workers the decrease is traced to gender specific factors which more than counterbalanced changes in measured and unmeasured prices working against women supply shifts net of demand were unfavorable for women generally and hurt high skilled more than middle and low skilled women by analyzing wages we find support for the notion of a gender twist in supply and demand having its largest negative effect on high skilled women

non manipulable house allocation with rent control in many real life house allocation problems rents are bounded from above by price ceilings imposed by a government or a local administration this is known as rent control because some price equilibria may be disqualified given such restrictions this paper proposes an alternative equilibrium concept called rationing price equilibrium tailored to capture the specific features of housing markets with rent control an allocation rule that always selects a rationing price equilibrium is defined and it is demonstrated to be constrained efficient and group non manipulable for almost all preference profiles in its bounding cases the rule reduces to a number of well known mechanisms from the matching literature in this sense the housing market with rent control investigated in this paper integrates several of the predominant matching models into a more general framework

connecting the cooperative and competitive structures of the multiple partners assignment game multiple partners assignment game is the name used by sotomayor the multiple partners game in m majumdar ed equilibrium and dynamics essays in honor of david gale the macmillan press ltd new york 1992 the lattice structure of the set of stable outcomes of the multiple partners assignment game int j game theory 28 1999 567 583 to describe the cooperative structure of the many to many matching market with additively separable utilities stability concept is proved to be different from the core concept an economic structure is proposed where the concept of competitive equilibrium payoff is introduced in connection to the equilibrium concept from standard microeconomic theory the paper examines how this equilibrium concept compares with the cooperative equilibrium concept properties of interest to the cooperative and competitive markets are derived