estimation of the structure and elasticities of mexican imports in the period 1961 1979 abstract this paper examines the changing structure of mexican imports over the period 1961 1979 and its relationship to the acceleration of imports in 1978 1979 it is found that the more lenient policies adopted by the government in that period seem to be associated with the higher import levels a review of mexican policy with respect to foreign trade in 1980 seems to be consistent with the results reported in this paper

optimal auction with resale this paper investigates the design of seller optimal auctions when winning bidders can attempt to resell the good in that case the optimal allocation characterized by myerson 1981 cannot be achieved without resale i find a sufficient and necessary condition for sincere bidding given the possibility of resale in two bidder cases i prove that the myerson allocation can be achieved under standard conditions supplemented with two assumptions with three or more bidders achieving the myerson allocation is more difficult i prove that it can be implemented in special cases in those cases the myerson allocation is generated through a sequence of resale auctions each optimally chosen by a reseller

the supply response of aggregate agricultural output in jamaica abstract a dominant theme in the development literature is that individual agricultural products responds to price incentives not because of shifts between products but that total agricultural output is not responsive to price the econometric evidence for jamaica shows that this presumption is not valid the paper begins by reviewing the growth experience of the jamaican economy it then analyzes the trends in agricultural production the remainder of the paper provides the econometric estimates of broad agricultural output to price the empirical evidence shows that aggregate agricultural output is responsive to price but it will take time for agricultural production to materialize a summary of the published estimates of the supply response for individual crops is also presented

selling an asset to a competitor a seller decides whether to allocate an item among two potential buyers the seller and buyer 1 interact ex post in such a way that each of them suffers a negative externality if the other possesses the item we show that the optimal allocation rule favors buyer 2 who does not interact ex post with the seller and in particular bidder 1 may not obtain the good even if his valuation is highest the auction is therefore subject to resale when resale is possible the seller must distort the original auction we show that the mechanism depends crucially on the way resale is organized ex post the seller may decide to always allocate the good to the agent with the highest valuation when rents are fully extracted by an intermediary on the resale market however she may resort to a stochastic mechanism when the winner of the primary auction has full bargaining power in the resale stage

research note optimal selling in dynamic auctions adaptation versus commitment this paper analyzes optimal selling strategies of a monopolist facing forward looking patient unit demand bidders in a sequential auction market such a seller faces a fundamental choice between two selling regimes adaptive selling that involves learning about remaining demand from early prices and commitment selling that forgoes such learning and makes all selling decisions in the beginning of the game a model of the game between the seller and the bidders is proposed to characterize the optimal regime choice the model implies that the relative profitability of the two regimes depends on the expected gains from trade when the expected gains from trade are low commitment dominates adaptation and vice versa

first price auctions with resale abstract we present a simple model of first price auction with two bidders whose valuations are not identically distributed and where resale is possible between the bidders and given an explicit expression for the equilibrium strategies

collusion via signalling in simultaneous ascending bid auctions with heterogeneous objects with and without complementarities collusive equilibria exist in simultaneous ascending bid auctions with multiple objects even with large complementarities in the buyers utility functions the bidders collude by dividing the objects among themselves while keeping the prices low in the most collusive equilibrium the complementarities are never realized the scope for collusion however narrows as the ratio between the number of bidders and the number of objects increases

how reliable are simple single equation specifications of import demand this paper examines nine models of aggregate import demand for each of five countries canada germany japan united kingdom and united states in an attempt to determine which of the frequently used single equation models of import demand are appropriate an appropriate model is defined as one which generates unbiased or at least consistent and efficient elasticity estimates while models without lagged adjustments and almon lag models perform rather poorly according to these criteria models including dynamic behavior through lagged values of the dependent variable are frequently accepted results are reported regarding functional form measures of variables and structural shift economists have devoted considerable attention to the estimation of aggregate import demand elasticities because of their importance in trade theory the simplest procedure for estimating these elasticities which is consistent with economic theory is to assume that the elasticity of supply of imports is infinitely elastic and to estimate

how not to sell nuclear weapons we consider situations where a sale affects the ensuing interaction between potential buyers these situations are modeled by assuming that an agent who does not acquire the object for sale incurs an identity dependent externality we construct a revenue maximizing auction for the seller we observe that 1 outside options and participation constraints are endogenous 2 the seller extracts surplus also from agents who do not obtain the auctioned object 3 the seller is better off by not selling at all while obtaining some payments if externalities are much larger than valuations

the principal agent relationship with an informed principal ii common values in many circumstances a principal may have relevant private information when she proposes a contract to an agent we analyze such a principal agent relationship as a noncooperative game the principal proposes a contract which is accepted or rejected by the agent who for most of our analysis has no private information the contract is executed if accepted otherwise the reservation allocation takes effect this allocation may be determined by a pre existing contract which the principal by her proposal is attempting to renegotiate or it may simply be the no trade point in this paper we assume that the principal s information directly affects the agent s payoff before solving the game we discuss pareto efficiency with asymmetric information we define an incentive compatible allocation to be weakly interim efficient wie if there exists no alternative incentive compatible allocation that both parties prefer for all possible beliefs that the agent might have about the principal s private information type we show that any wie allocation is interim efficient ie for some beliefs the rothschild stiglitz wilson rsw allocation relative to the reservation allocation l is the allocation that maximizes the payoff of each type of principal within the class of incentive compatible allocations that guarantee the agent at least the utility he gets from a irrespective of his beliefs about the principal s type the equilibrium set of the contract proposal game consists of the allocations that weakly pareto dominate the rsw allocation thus there is a unique equilibrium outcome if and only if the latter is ie and the equilibrium outcome is the rsw allocation itself after characterizing the equilibrium allocations we study those that are renegotiation proof when either the principal or the agent leads the renegotiation we then compare our contract proposal game which is a signaling model with its screening counterpart we conclude by extending our results to the case in which the agent as well as the principal has private information under the assumption of quasi linear preferences

collusion in second price auctions with heterogeneous bidders abstract we show that efficient collusion by any subset of bidders in second price private value auctions is possible even when the bidders are heterogeneous an important property of efficient collusion is that a bidder s net payoff from participating in collusion is independent of her valuation we show that the cooperative game whose characteristic function evaluated at a coalition is the ex ante collusive surplus of that coalition has a nonempty core a feature of more technical interest is the mechanism characterization when the private information of agents does not enter in a linear or even piecewise linear manner

collusive bidder behavior at single object second price and english auctions models of collusive bidder behavior at single object second price and english auctions are provided the ind ependent private values model is generalized to permit the formulatio n of coalitions and a strategic response by the auctioneer cooperati ve strategies are found to be dominant in these models coalitions of any size are viable and the payoff to each member increases with th e size of the coalition in addition the collusive strategies of the coalition represent a noncooperative equilibrium the optimal respon se of the auctioneer is to establish a reserve price that is a functi on of the coalition s size these and other features of the model are found to be consistent with the essential features of actual behavio r copyright 1987 by university of chicago press

optimal operation of a chp plant participating in the german electricity balancing and day ahead spot market abstract during the last years operators of combined heat and power chp plants are challenged by changing circumstances in the electricity markets while ensuring a stable heat and power supply for customers chp plant operators seek to maximise the profitability of the chp plant operation we propose a comprehensive concept and illustrate its potential for increasing the profitability when operating a chp plant with heat storage by participating in multiple electricity markets for this purpose the structure of the decision making process consisting of bid submission market clearing and chp plant operation planning is represented a multistage stochastic mixed integer linear programming milp model is developed that simultaneously optimises the operation of the chp plant with heat storage and bidding in sequential electricity markets price uncertainty is captured by means of stochastic processes the proposed concept is applied to the real case of a municipal energy supply company that participates in the german day ahead spot and balancing market results of the case study illustrate how trading in sequential electricity markets can result in an increased profitability of the chp plant operation where additional revenues from trading offset higher generation costs furthermore we exemplify how the optimal operation of the chp plant and heat storage device are adjusted according to revenue potential in multiple electricity markets

an aggregate import demand function for bangladesh a cointegration approach this paper investigates the existence of a long run aggregate merchandise import demand function for bangladesh during the period 1974 94 the cointegration and error correction modelling approaches have been applied empirical results suggest that there exists a unique long run or equilibrium relationship among real quantitities of imports real import prices real gdp and real foreign exchange reserves the dynamic behaviour of import demand has been investigated by estimating two types of error correction models in which the error correction terms have been found significant in model i real import prices and real gdp lagged one year and in model ii real import prices real gdp lagged one year real imports lagged one quarter and a dummy variable capturing the effects of import liberalization policies have all emerged as important determinants of import demand function the error correction models have also been found to be robust as they satisfy almost all relevant diagnostic tests

forecasting day ahead electricity prices utilizing hourly prices abstract the daily average price of electricity represents the price of electricity to be delivered over the full next day and serves as a key reference price in the electricity market it is an aggregate that equals the average of hourly prices for delivery during each of the 24 individual hours this paper demonstrates that the disaggregated hourly prices contain useful predictive information for the daily average price in the nord pool market multivariate models for the full panel of hourly prices significantly outperform univariate models of the daily average price with reductions in root mean squared error of up to 16 substantial care is required in order to achieve these forecast improvements rich multivariate models are needed to exploit the relations between different hourly prices but the risk of overfitting must be mitigated by using dimension reduction techniques shrinkage and forecast combinations

the determinants of import demand in trinidad and tobago 1967 84 1988 the determinants of import demand in trinidad and tobago 1967 84 applied economics vol 20 no 3 pp 303 313

mechanism design by an informed principal private values with transferable utility we provide a solution to the informed principal problem in the independent private values setting with monetary transfers the principal s private information creates signaling considerations that may distort the implemented allocation we show that there is no distortion all principal types implement an allocation that is optimal for the principal ex ante before he she learns his her type as an application we consider settings with linear utility for bilateral exchange in which the principal is one of the traders the solution is a combination of a participation fee a buy out option for the principal and a resale stage with posted prices

english auctions with resale an experimental study i design and test a simple english auction and two english auctions with resale but with different informational backgrounds all three treatments theoretically have the same equilibrium i find however that the possibility of resale alters behavior significantly in the two treatments with resale subjects deviated from both the nash prediction and the common results about bidding behavior in english auctions subjects tend to overbid when they are certain they can reap the whole surplus in the resale market i employ different models like qre and levels of reasoning and conclude that overbidding can be explained as a rational response to the noisy environment in markets with human participants that is as rational decision making when anticipating others to make errors when the outcome of the resale market is not certain there is significant signaling behavior and auction prices tend to be lower than the nash prediction

all equilibria of the vickrey auction abstract this paper characterizes the set of nash equilibria in the second price sealed bid auction with independent private values and three or more bidders in addition we show that any effective reserve price implies uniqueness

forecasting nord pool day ahead prices with an autoregressive model abstract this paper presents a model to forecast nord pool hourly day ahead prices the model is based on weron and misiorek 2008 but reduced in terms of estimation parameters from 24 sets to 1 and modified to include nordic demand and danish wind power as exogenous variables we model prices across all hours in the analysis period rather than across each single hour of 24 hours by applying three model variants on nord pool data we achieve a weekly mean absolute percentage error wmae of around 6 7 and an hourly mean absolute percentage error mape ranging from 8 to 11 out of sample results yields a wmae and an hourly mape of around 5 the models enable analysts and traders to forecast hourly day ahead prices accurately moreover the models are relatively straightforward and user friendly to implement they can be set up in any trading organization

determinants of international trade flows the case of developing countries abstract the question of magnitude and the time path of the trade flows to changes in the exchange rates and to changes in the price level is of emitent practical importance to assess the above proposition a distributed lag structure is imposed on the relative prices and on the effective exchange rate as the determinants of trade flows then import and export demand functions are estimated for a sample of developing countries using the almon procedure the empirical findings appeared to sustain orcutt s early conjecture that trade flows adjust differently to different price stimuli more precisely it was found that imports and exports reactions were quicker and the total response time was shorter when an exchange rate rather than relative prices caused a change in international prices

optimal mechanism design with resale via bargaining abstract in this paper we examine the optimal mechanism design of selling an indivisible object to one regular buyer and one publicly known buyer where inter buyer resale cannot be prohibited the resale market is modeled as a stochastic ultimatum bargaining game between the two buyers we fully characterize an optimal mechanism under general conditions surprisingly in this optimal mechanism the seller never allocates the object to the regular buyer regardless of his bargaining power in the resale market the seller sells only to the publicly known buyer and reveals no additional information to the resale market the possibility of resale causes the seller to sometimes hold back the object which under our setup is never optimal if resale is prohibited we find that the seller s revenue is increasing in the publicly known buyer s bargaining power in the resale market when the publicly known buyer has full bargaining power myerson s optimal revenue is achieved when the publicly known buyer has no bargaining power a conditionally efficient mechanism prevails

partial pooling at the reserve price in auctions with resale opportunities abstract two features common to many auctions are the use of reserve prices and the existence of secondary markets for the goods being sold even in simple symmetric settings the combination of these features can preclude existence of an equilibrium in symmetric separating bidding strategies with a reserve price sufficiently far below the maximum endogenous valuation a symmetric equilibrium still exists but with some types pooling at the reserve the optimal reserve price depends not only on the joint distribution of bidders information before and after the auction but also on how surplus is divided in the secondary market journal of economic literature classification numbers d44 c7 l1 d82

import compression and export performance in developing countries the debt crisis that began in 1982 forced a number of developing countries that had relied on external financing into rapid adjustment of their current account positions in many of these countries external adjustment mainly took the form of import reduction or what has been termed import compression to generate trade balance surpluses necessary to service the existing stock of foreign debt while the effects of import compression on consumption and growth have been discussed in the literature there has been little concern expressed with regard to the direct effects such a policy can have on export performance this paper develops a model that takes explicit account of the feedbacks between imports and exports that arise through the effects of imported inputs on exports and the availability of foreign exchange on imports empirical tests of this model for 34 developing countries tend to confirm both these hypotheses these results point clearly for additional foreign financing to reduce the need for import compression and its attendant negative effects on the supply of exports

reconsidering carbon permits auction mechanism an efficient dynamic model one of major concerns for china and developing countries is the new international trade rule concerning carbon emissions which one needs to know its suitable mechanism and the possible implication on china s carbon trading market precisely in an emission and trade scheme an important question is whether the auction outcome is efficient since this is closely related with the economic costs of emissions reduction due to the unique features of carbon permits existing auction mechanisms do not seem to be suitable for their distribution inspired by the t tonnement process this paper proposes a new auction mechanism for them for both practical application and theoretical extension the discrete and continuous situations are examined respectively the result shows that the proposed auction converges to pareto optimal equilibria and that without ties the equilibrium is unique for bidders the straightforward bidding strategy is the most preferred one in the sense that the strategy makes them avoid the risk of loss intuitively the auctioneer s utility is increasing in the number of bidders while bidders pay off is increasing in permits to a certain extent the proposed auction mechanism resolves the confliction between efficiency and revenue in the multi item auction theory while it increases people s understanding for carbon emission auction mechanism design

trade liberalisation the peso and mexico s commodity trade flows with the united states abstract we assess the effects of real peso devaluations as well as the effects of gatt and nafta on mexico s in payments and out payments with the united states for 102 industries we find that relatively few trade flows are sensitive to changes in the real exchange rate probably due to production sharing and intra industry trade but devaluations affect mexican imports more than exports trade liberalisation has had a larger impact particularly on imports of intermediate goods and exports of certain manufactures many affected export industries are ones that have previously been shown to have economies of scale

forecasting day ahead electricity spot prices the impact of the exaa to other european electricity markets abstract in our paper we analyze the relationship between the day ahead electricity price of the energy exchange austria exaa and other day ahead electricity prices in europe we focus on markets which settle their prices after the exaa which enables traders to include the exaa price into their calculations for each market we employ econometric models to incorporate the exaa price and compare them with their counterparts without the price of the austrian exchange by employing a forecasting study we find that electricity price models can be improved when exaa prices are considered

different approaches of modelling reaction lags how do chilean manufacturing exports react to movements of the real exchange rate this study examines the relationship between export supply and the real exchange rate using annual chilean data for the period 1960 1996 the hypotheses to be tested are first that the real exchange rate does matter for the supply of exports contrary to studies relying on quarterly data and second that the impact of a real depreciation only ceases to be positive and significant after about two three years four different distributed lag models were considered as potentially adequate and useful to depict the impact of the real exchange rate over time even though all four models assumed different underlying lag structures they all point to the importance of maintaining a competitive real exchange rate over time the transfer function model is particularly well suited in shaping any lag structure in that it is not presumptive in form

efficient modeling and forecasting of electricity spot prices abstract the increasing importance of renewable energy especially solar and wind power has led to new forces in the formation of electricity prices hence this paper introduces an econometric model for the hourly time series of electricity prices of the european power exchange epex which incorporates specific features like renewable energy the model consists of several sophisticated and established approaches and can be regarded as a periodic var tarch with wind power solar power and load as influences on the time series it is able to map the distinct and well known features of electricity prices in germany an efficient iteratively reweighted lasso approach is used for the estimation moreover it is shown that several existing models are outperformed by the procedure developed in this paper

social acceptance of renewable energy innovation an introduction to the concept this paper introduces the special issue on social acceptance of renewable energy innovation it is a collection of best papers presented at an international research conference held in tramelan switzerland in february 2006 while there are ambitious government targets to increase the share of renewable energy in many countries it is increasingly recognized that social acceptance may be a constraining factor in achieving this target this is particularly apparent in the case of wind energy which has become a subject of contested debates in several countries largely due to its visual impact on landscapes this paper introduces three dimensions of social acceptance namely socio political community and market acceptance factors influencing socio political and community acceptance are increasingly recognized as being important for understanding the apparent contradictions between general public support for renewable energy innovation and the difficult realization of specific projects the third dimension market acceptance has received less attention so far and provides opportunities for further research particularly from management scholars

recent trends in the terms of trade of jamaica 1955 86 the prebisch singer hypothesis of a long term deterioration in the commodity terms of trade of developing countries has evoked tremendous controversy in the literature most of the empirical work on the terms of trade is devoted to all developing countries this paper is country specific modern time series techniques have been used to test the perbisch singer hypothesis the empirical results for jamaica support the declining terms of trade hypothesis unit root tests indicate that jamaica s terms of trade is trend stationary finally the empirical evidence suggests that the decline in the terms of trade accounted for an annual loss of approximately 1 5 percent in jamaica s gdp

the dynamics of incentive contracts the paper studies a simple two period principal agent model in which the principal updates the incentive scheme after observing the agent s first period performance the agent has superior information about his ability the principal offers a first period incentive scheme and observes some measure of the agent s first period performance cost or profit which depends on the agent s ability and unobservable first period effort the relationship is entirely run by short term contracts in the second period the principal updates the incentive scheme and the agent is free to accept the new incentive scheme or to quit the strategies are required to be perfect and updating of the principal s beliefs about the agent s ability follows bayes rule the central theme of the paper is that the ratchet effect leads to much pooling in the first period first for any first period incentive scheme there exists no separating equilibrium second when the uncertainty about the agent s ability is small the optimal scheme must involve a large amount of pooling the paper also gives necessary and sufficient conditions for the existence of partition equilibria and looks at the effect of cost uncertainty

the supply and demand for imports and exports in a simultaneous model previous studies on the behaviour of aggregate exports and imports have tended to ignore the simultaneous relationship between quantity and price this paper investigates the price responsiveness of export and import demand and supply in eight african countries the results indicate that export demand price elasticities are smaller when the sample is african the import supply and demand elasticities were found to be generally large the marshall lerner condition of balance of payment stability is found to be easily satisfied a positively sloped function of export supply is found to exist for a majority of countries in the sample the average time lag of export supply is found to be about a year the disequilibrium model is found to be more appropriate for import demand import supply and export supply

weak cartels and collusion proof auctions abstract we study private value auctions in which bidders may collude without using side payments in our model bidders coordinate their actions to achieve an outcome that interim pareto dominates the noncooperative outcome we characterize auctions that are collusion proof in the sense that no such coordination opportunities exist and show that the efficient and revenue maximizing auctions are not collusion proof unless all bidders exhibit a concave distribution of valuations we then solve for revenue maximizing collusion proof auctions if distributions of valuations are symmetric and single peaked the optimal selling mechanism is a standard auction with a minimum bid followed by sequential negotiation in case no bidder bids above the minimum bid

horizontal mergers with synergies cash vs profit share auctions we consider takeover bidding in a cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target and bidders can influence rivals beliefs through their bids we compare cash and profit share auctions first and second price supplemented by entry fees since non merged firms benefit from a merger if synergies are low bidders are subject to a positive externality with positive probability nevertheless pooling does not occur unlike cash auctions profit share auctions are not revenue equivalent and the second price profit share auction is more profitable than the other auctions

a note on the burden of the mexican foreign debt abstract this paper examines the macroeconomic repercussions of the future foreign debt restrictions that mexico will face our view is that credit conditions will be fundamentally modified in the years to come so that the foreign debt will have to grow at a substantial lower rate than in the recent past given the reduced availability of foreign savings the relevant question is whether the country will be able to generate enough internal savings to compensate for the fall of foreign savings and thus produce the necessary flow of investment to sustain an adequate rate of growth we also examine the burden of the interest rate that mexico is paying on its foreign debt in terms of additional required savings and or lower economic growth

devaluation and the balance of payments adjustment in a developing economy an analysis relating to jamaica 1954 72 jamaica is a small open and structurally dependent export propelled country the island spans an area of 4411 square miles and has a population of nearly 2 million measured at 1965 prices the gross domestic product gdp increased from 297m j in 1954 to 912m j in 1972 or grew at an average rate of around 5 per annum 1 unemployment averaged around 20 and is increasing explosively exports are concentrated in three commodities bauxite alumina sugar and bananas together these three commodities averaged 76 of total commodity exports between 1954 and 1972 tourism is the second largest earner of foreign exchange increasing from 11 4m in 1954 to 107 9m in 1972 on the other hand the economy is heavily dependent on imports for capital goods raw materials fuels and intermediate goods for its import substitution and industrialization programmes also consumer goods to complement domestic supply or in some cases to meet the entire requirement of domestic demand for the period 1954 72 the im

speculation and demand reduction in english clock auctions with resale many auctions are followed by a resale market which occurs when the winner of the auction resells the item won to one of the participants from the original auction the existence of such transactions may initially appear counter intuitive however this paper will show that active inter bidder resale results from payoff maximizing decisions in the auction that take into account the incentives of a resale opportunity specifically i examine how the existence of an inter bidder resale opportunity impacts bidder behavior in an english clock auction and to what extent altering the bargaining power of the final buyer and reseller in the resale market determines the strategies followed in the initial auction in an attempt to understand the existence of these inter bidder transactions theoretical and behavioral analysis is used to develop hypotheses of speculation bidding above value and demand reduction bidding below value which are directly tested in a controlled experimental setting while value bidding is a dominant strategy in a standard english clock auction without resale when resale is allowed this theoretical claim is weaker demand reduction is observed when the bargaining power is shifted to the final buyer in resale and when the bargaining power is shifted toward the reseller speculation is observed the revenue achieved in the initial auction depends on the behavior observed in the auction regardless of bargaining power revenue is shown to decrease below what would have been earned in an english auction without resale due to demand reduction when the reseller has the bargaining power and speculation is observed this loss in revenue is somewhat mitigated by increased speculation

price policy and agricultural export performance in jamaica abstract jamaica experienced one of the longest uninterrupted periods of negative growth among ldcs in the 1970s agricultural exports led this decline with an unusually poor growth performance exacerbating foreign exchange shortages commodity board pricing policies played a strong role in penalizing these exports further board policies appear to be inefficient in either maximizing profits or foreign exchange implicit and unstated objectives of board policies are discussed supply functions show that farmers do react positively to price changes contrary to board assumptions beneficiaries of this penalizing price policy are identified and an important implication for foreign aid policy is underscored

a garch forecasting model to predict day ahead electricity prices price forecasting is becoming increasingly relevant to producers and consumers in the new competitive electric power markets both for spot markets and long term contracts price forecasts are necessary to develop bidding strategies or negotiation skills in order to maximize profits this paper provides an approach to predict next day electricity prices based on the generalized autoregressive conditional heteroskedastic garch methodology that is already being used to analyze time series data in general a detailed explanation of garch models is presented and empirical results from the mainland spain and california deregulated electricity markets are discussed

resale markets and the assignment of property rights the consumption of an indivisible good causes identity dependent externalities to non consumers we analyse resale markets where the current owner designs the trading procedure but cannot commit to future actions we ask the following questions 1 doer the identity of the initial owner matter for the determination of the final consumer 2 is the outcome always efficient the major conclusion of our paper is that the irrelevance of the initial structure of property rights arises in resale processes even if there are transaction costs that hinder efficiency this result complements the coasian view where the irrelevance of the assignment of property rights is a consequence of efficiency

jump bidding and overconcentration in decentralized simultaneous ascending auctions abstract a model of english auctions is proposed to incorporate the possibility of jump bidding when two objects are sold separately via such auctions bidders signal their willingness to pay via jump bids thereby forming rational expectations of the prices without relying on any central mediator hence a multi item bidder does not suffer the exposure problem of having to buy an item while he is uncertain about the price of its complement single item bidders however free ride one another in competing against a multi item bidder consequently the auctions overly concentrate the goods to a multi item bidder and never overly diffuse them to single item bidders

forecasting monthly peak demand of electricity in india a critique the nature of electricity differs from that of other commodities since electricity is a non storable good and there have been significant seasonal and diurnal variations of demand under such condition precise forecasting of demand for electricity should be an integral part of the planning process as this enables the policy makers to provide directions on cost effective investment and on scheduling the operation of the existing and new power plants so that the supply of electricity can be made adequate enough to meet the future demand and its variations official load forecasting in india done by central electricity authority cea is often criticized for being overestimated due to inferior techniques used for forecasting this paper tries to evaluate monthly peak demand forecasting performance predicted by cea using trend method and compare it with those predicted by multiplicative seasonal autoregressive integrated moving average msarima model it has been found that msarima model outperforms cea forecasts both in sample static and out of sample dynamic forecast horizons in all five regional grids in india for better load management and grid discipline this study suggests employing sophisticated techniques like msarima for peak load forecasting in india

arima models to predict next day electricity prices price forecasting is becoming increasingly relevant to producers and consumers in the new competitive electric power markets both for spot markets and long term contracts price forecasts are necessary to develop bidding strategies or negotiation skills in order to maximize benefit this paper provides a method to predict next day electricity prices based on the arima methodology arima techniques are used to analyze time series and in the past have been mainly used for load forecasting due to their accuracy and mathematical soundness a detailed explanation of the aforementioned arima models and results from mainland spain and californian markets are presented

recent advances in electricity price forecasting a review of probabilistic forecasting abstract since the inception of competitive power markets two decades ago electricity price forecasting epf has gradually become a fundamental process for energy companies decision making mechanisms over the years the bulk of research has concerned point predictions however the recent introduction of smart grids and renewable integration requirements has had the effect of increasing the uncertainty of future supply demand and prices academics and practitioners alike have come to understand that probabilistic electricity price and load forecasting is now more important for energy systems planning and operations than ever before with this paper we offer a tutorial review of probabilistic epf and present much needed guidelines for the rigorous use of methods measures and tests in line with the paradigm of maximizing sharpness subject to reliability the paper can be treated as an update and a further extension of the otherwise comprehensive epf review of weron 1 or as a standalone treatment of a fascinating and underdeveloped topic that has a much broader reach than epf itself

are devaluations contractionary recently a number of authors have criticized the role of devaluations in traditional stabilization programs it has been argued that contrary to the traditional view devaluations are contractionary and generate a decline in aggregate output in spite of the renewed theoretical interest in the possible contractionary effects of devaluations the empirical evidence on the subject has been quite sketchy in this paper the khan and knight 1981 model is extended to empirically address the issue of contractionary devaluations the extended model considers the effect of money surprises fiscal factors terms of trade changes and devaluations on the level of real output the results obtained using a variance components procedure on data for 12 developing countries provide some support to the short run contractionary devaluation hypothesis the results obtained indicate that in the short run a devaluation will generate a decline in aggregate output it is also found that after one year a devaluation will have an expansionary effecton output the evidence suggests that in the long run devaluations will have no effect on output this abstract was borrowed from another version of this item

multi object auctions with resale theory and experiment abstract we study multi object auctions in the presence of post auction trade opportunities among bidders who have either single or multi object demand we focus on two formats vickrey auctions where package bidding is possible and simultaneous second price auctions we show that under complementarities the vickrey format has an equilibrium where the objects are allocated efficiently at the auction stage whether resale markets are present or not the simultaneous second price on the other hand leads to inefficiency with or without resale possibility our experimental findings show that the possibility of resale in second price auctions decreases the efficiency rate at the auction stage compared to the no resale case however after resale the efficiency rate in second price is as high as that of vickrey auction without resale outcomes in the experiment preventing resale neither benefits nor hurts auction revenues in a second price format

bilateral trading in networks in many markets goods flow from initial producers to final customers travelling through many layers of intermediaries and information is asymmetric we study a dynamic model of bargaining in networks that captures these features we show that the equilibrium price demanded over time is non monotonic but the sequence of transaction prices declines over time with the possible exception of the last period the price dynamic is therefore reminiscent of fire sales and hot potato trading traders who intermediate the object arise endogenously and make a positive profit the profit earning intermediaries are not necessarily traders with many connections for the case of multilayer networks they belong to the path that reaches the maximum number of potential buyers using the minimal number of intermediaries this is not necessarily the path of the network that maximizes the probability of consumption by traders who value the most the object i e welfare

trade policy in mexico this evaluation examines mexican trade policies applied over three well defined periods during the last quarter century and makes recommendations for the future each discussion begins with a description of the macroeconomic background and then analyzes trade policy developments of the period with further attention given to industrial policy measures changes in mexican exports and imports and their contribution to industrial growth are discussed mexico s current economic difficulties stem from 1956 when increases in public consumption contributed to inflation and to the appreciation of the peso in real terms under fixed exchange rates the overvaluation of the exchange rate led to the application of protectionist measures which discriminated against exports the situation was aggravated by excessively expansionary policies which necessitated substantial foreign borrowing and exacerbated protectionist pressures this paper makes recommendations for remedying macroeconomic disequilibria reducing price distortions and reforming trade policy with a view to moving towards an outward oriented development strategy future growth will depend however on increased investments particularly in export activities that may be encouraged by appropriate incentives

stabilization the political economy of overkill abstract this paper considers whether national and international aspects of the imf s stabilization programmes during the 1970s and early 1980s have resulted in a process of overkill or in other words a process of economic retrenchment which went much further than was strictly necessary in terms of what could have been regarded as reasonable objectives in the international context the author describes how the attack on inflation has become an end in itself at the expense of other stated objectives of the imf thus creating a distortion of its priorities the paper discusses errors of diagnosis which have led to this disorientation and explains why deflationary policies should not be regarded as a panacea the paper then considers the nead for equity and efficiency in the distribution of the political and economic costs of adjustment the next section of this paper discusses the assumptions underlying the imf s treatment of fund members and to what extent even handedness in the application of stabilization measures may result in inequality of burden sharing among borrowers problems related to monetarist theories and the consequent policies are examined followed by a consideration of the dangers involved in devising straightforward performance criteria in the form of precise monetary targets that can readily be monitored by the imf this means of evaluating the national adjustment policies success is seen to be unsatisfactory viz the frequency of stand by arrangement breakdowns and mistakes in forecasting the paper concludes that the concept of unilateral adjustment is not an acceptable basis for imf supervision of the international monetary system in addition care should be taken to avoid overkill in determining the degree and character of adjustment needed in stabilization programmes one possible solution to the extra burden imposed on the ldcs might be a liberalization of the compensatory financing facility with the objective of applying the same kind of regime to imports as to exports

bidding for the future signaling in auctions with an aftermarket abstract this paper considers auctions where bidders compete for an advantage in future strategic interactions when bidders wish to exaggerate their private information equilibrium bidding functions are biased upwards as bidders attempt to signal via the winning bid signaling is most prominent in second price auctions where equilibrium bids are above value in english and first price auctions signaling is less extreme since the winner incurs the cost of her signaling choice the opportunity to signal lowers bidders payoffs and raises revenue when bidders understate their private information separating equilibria need not exist and the auction may not be efficient

asymmetric auctions with resale we study first and second price auctions with resale in a model with indepen dent private values with asymmetric bidders the resulting inefficiencies create a motive for post auction trade which in our model takes place via monopoly pricing the winner makes a take it or leave it offer to the loser we show a a first price auction with resale has a unique monotonic equilibrium and b with resale the expected revenue from a first price auction exceeds that from a second price auction the inclusion of resale possibilities thus permits a gen eral revenue ranking of the two auctions that is not available when these are excluded jel d44

hedging local volume risk using forward markets nordic case abstract with focus on the nordic electricity market this paper develops hedging strategies for an electricity distributor who manages price and volume risk from fixed price agreements on stochastic electricity load whereas the distributor trades in the spot market at area prices the financial contracts used for hedging are settled against the system price area and system prices are correlated with electricity load as are price differences in practice however this is often disregarded here we develop a joint model for the area price the system price and the load accounting for correlations and we suggest various strategies for hedging in the presence of local volume risk we benchmark against a strategy that ignores correlation and hedges at expected load as is common practice in the industry using data from 2013 and 2014 for two danish bidding areas we show that our best hedging strategy reduces gross loss by 5 8 and 13 6 and increases gross profit by 3 8 and 9 5 respectively although this is partly due to the inclusion of correlation we show that performance improvement is mainly driven by the choice of risk measure

imports under a foreign exchange constraint the traditional model of import behavior which looks only at the gross domestic product gdp and real import prices as explanatory variables failed to predict or explain the developing countries import slumps in the early 1980 s this paper expands on a more useful model the hemphill which incorporates the traditional variables relative prices and domestic income with the variables introduced by hemphill foreign exchange receipts and international reserves section 2 of this paper discusses the theoretical models in the present study the traditional model used here as a benchmark is presented first and is later extended to include foreign exchange constraints section 3 presents the empirical estimates of the general import models that include foreign constraints and two special cases the hemphill and benchmark models using pooled cross section time series section 4 concludes that policy makers must look at the policies that affect gdp and prices and the availability of foreign exchange when trying to estimate import behavior in developing countries

foreign exchange constraints and growth possibilities in the ldcs abstract we analyse the influence of foreign exchange constraints on output growth in the ldcs by studying the effect that these constraints have on the speed of adjustment of both investment and import activities we model the speed of adjustment of investment as a function of available foreign exchange resources and allow for imperfect substitutability between the domestic and the foreign capital stocks

auctions with resale markets an application to u s forest service timber sales when bidders anticipate an opportunity for resale trade the value of winning an auction is determined in part by the option values of buying and selling in the secondary market one implication is that a bidder s willingness to pay at an auction increases with the expected level of competition between resale buyers empirical evidence from auctions of timber contracts supports this prediction and rejects standard models that ignore resale the estimated effect is smaller after policy changes expected to diminish the prevalence of resale additional evidence supports the predicted presence of a common value element introduced by the resale opportunity

overcoming adverse selection how public intervention can restore market functioning as illustrated by liquidity support equity injections and asset repurchases in financial crises and by imf credit lines to countries authorities often intervene in orderto revive markets that have dried up or to create newones in suchsituations agents participate only if they receive from the governmental scheme more than in the marketplace while the market outcome depends on who joins the scheme the paper provides a first analysis of market jumpstarting and its two way interaction between mechanism design and participation constraints in the model sellers in need of cash have private information about the value of their legacy asset the absence of buyer confidence forces authorities to intervene to jump start the market we characterize the optimal intervention and draw two main implications first the government should clean up the market through buybacks of the weakest assets and then through some equity injections and leave the agents with the strongest legacy assets to the market in particular authorities should not substitute fully for the market even when they have no comparative disadvantage in acquiring assets or shares thereof second the government creates its own competition by cleaning up the market from its most toxic pieces at the optimal intervention the government always strictly overpays for the legacy asset yet and unlike what would be suggested by coasian profit evasion the existence of a later market imposes no welfare cost while it is cast in a public intervention context the analysis of mechanismdependent reservation utilities also admits important private sector applications

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

on the importance of the long term seasonal component in day ahead electricity price forecasting abstract in day ahead electricity price forecasting epf the daily and weekly seasonalities are always taken into account but the long term seasonal component ltsc is believed to add unnecessary complexity to the already parameter rich models and is generally ignored conducting an extensive empirical study involving state of the art time series models we show that i decomposing a series of electricity prices into a ltsc and a stochastic component ii modeling them independently and iii combining their forecasts can bring contrary to a common belief an accuracy gain compared to an approach in which a given time series model is calibrated to the prices themselves

resale in second price auctions with costly participation abstract we study sealed bid second price auctions with costly participation and resale each bidder chooses to participate in the auction if her valuation is higher than her optimally chosen participation cutoff if resale is not allowed and the bidder valuations are drawn from a strictly convex distribution function the symmetric equilibrium where all bidders use the same cutoff is less efficient than a class of two cutoff asymmetric equilibria existence of these equilibria without resale is sufficient for existence of similarly constructed two cutoff equilibria with resale moreover the equilibria with resale are more asymmetric and under a sufficient condition more efficient than the corresponding equilibria without resale

foreign exchange reserves and import demand evidence from latin america this paper investigates the impact of foreign reserves domestic real income and relative import prices on import demand for seven latin american countries we differentiate empirically between the short run and long run impact of reserves income and prices on imports the paper has three main results first we show that there exists a unique long run relationship among real imports real income relative import prices and real foreign exchange reserves for all seven countries second we find that increases in foreign exchange reserves exert a significant positive effect on import demand in both the long run and the short run in all countries however the economic impact of foreign exchange reserves is rather small finally we find that the long and short run impact of real domestic income on import demand is positive as well while the effect of relative prices is negative

simultaneous allocation of bundled goods through auctions assessing the case for joint bidding we study the costs and benefits of allowing joint bidding in multiple simultaneous first price sealed bid auctions for bundled goods with private values joint bidding raises the prospect of higher allocative efficiency but also reduces the number of bidders resulting in an ambiguous net impact on seller revenue the research was carried out using laboratory experiments in which groups of up to six buyers competed for eight bundles of two separable goods each the main results show that in our experimental environment allowing joint bidding increases efficiency by 11 3 and revenue by 9 4 the research has immediate applications to the sale of public forest stands that arbor a mixture of species for this reason we explore how the results are affected by excess supply the presence of dominant firms and the removal of an allocation rule requiring multiple bidders under certain circumstances

first price auctions in the asymmetric n bidder case i consider the first price auction when the bidders valuations may be differently distributed i show that every bayesian equilibrium is an essentially pure equilibrium formed by bid functions whose inverses are solutions of a system of differential equations with boundary conditions i then prove the existence of an equilibrium i prove its uniqueness when the valuation distributions have a mass point at the lower extremity of the support i give sufficient conditions for uniqueness when every valuation distribution is one of two atomless distributions i establish inequalities between equilibrium strategies when relations of stochastic dominance exist between valuation distributions

first price auctions with resale and with outcomes robust to bid disclosure although there exists a pure separating equilibrium of the two bidder first price auction with resale when the bids are kept secret the ratchet effect prevents the existence of such an equilibrium if the bidders are heterogeneous and the bids are fully disclosed nevertheless we construct a behavioral equilibrium under full disclosure that is equivalent to the pure separating equilibrium under no disclosure thus if the bidders follow this equilibrium the choice of the disclosure regime does not affect the final allocation of the item nor the expected payoffs

bidding for a process innovation under alternative modes of competition abstract this paper examines whether a first price sealed bid auction is efficient in allocating a process innovation amongst oligopolists engaged in either cournot or bertrand competition standard bidding behavior is modified by the incentive to signal private information in order to influence the oligopoly outcome it is shown that for cournot there exists a unique equilibrium in strictly increasing strategies that is symmetric and therefore allocatively efficient for bertrand an efficient equilibrium may not exist however efficiency is restored as the market becomes perfectly competitive the results underline the sensitivity of efficient auction design to downstream market structures

collusion via resale the english auction is susceptible to tacit collusion when post auction interbidder resale is allowed we show this by constructing equilibria where with positive probability one bidder wins the auction without any competition and divides the spoils by optimally reselling the good to the other bidders these equilibria interim pareto dominate among bidders the standard value bidding equilibrium without requiring the bidders to make any commitment on bidding behavior or postbidding spoil division

speculation in standard auctions with resale in standard auctions resale creates a role for a speculator a bidder who is commonly known to have no use value for the good on sale we study this issue in environments with symmetric independent private value bidders for second price and english auctions the efficient value bidding equilibrium coexists with a continuum of inefficient equilibria in which the speculator wins the auction and makes positive profits first price and dutch auctions have an essentially unique equilibrium and whether or not the speculator wins the auction and distorts the final allocation depends on the number of bidders the value distribution and the discount factor speculators do not make profits in first price or dutch auctions

arima forecasting of primary energy demand by fuel in turkey abstract forecasting of energy demand in emerging markets is one of the most important policy tools used by the decision makers all over the world in turkey most of the early studies used include various forms of econometric modeling however since the estimated economic and demographic parameters usually deviate from the realizations time series forecasting appears to give better results in this study we used the autoregressive integrated moving average arima and seasonal arima sarima methods to estimate the future primary energy demand of turkey from 2005 to 2020 the arima forecasting of the total primary energy demand appears to be more reliable than the summation of the individual forecasts the results have shown that the average annual growth rates of individual energy sources and total primary energy will decrease in all cases except wood and animal plant remains which will have negative growth rates the decrease in the rate of energy demand may be interpreted that the energy intensity peak will be achieved in the coming decades another interpretation is that any decrease in energy demand will slow down the economic growth during the forecasted period rates of changes and reserves in the fossil fuels indicate that inter fuel substitution should be made leading to a best mix of the country s energy system based on our findings we proposed some policy recommendations

robustly optimal auctions with unknown resale opportunities the standard revenue maximizing auction discriminates against a priori stronger bidders so as to reduce their information rents we show that such discrimination is no longer optimal when the auction s winner may resell to another bidder and the auctioneer has non bayesian uncertainty about such resale opportunities we identify a worst case resale scenario in which bidders values become publicly known after the auction and losing bidders compete bertrand style to buy the object from the winner with this form of resale misallocation no longer reduces the information rents of the high value bidder as he could still secure the same rents by buying the object in resale under regularity assumptions we show that revenue is maximized by a version of the vickrey auction with bidder specific reserve prices first proposed by ausubel and cramton 2004 the proof of optimality involves constructing lagrange multipliers on a double continuum of binding non local incentive constraints

optimality and the english and second price auctions with resale abstract in the presence of resale and under more general assumptions than zheng s 2002 implementation of myerson s 1981 optimal allocation with two bidders is achieved through the second price auction in a special class of asymmetric n bidder models it is achieved through the english auction

bidding to lose auctions with resale a losing bidder can still purchase the prize from the winner after the auction we show why a strong bidder may prefer to drop out of the auction before the price has reached her valuation and acquire the prize in the aftermarket a strong bidder may be in a better bargaining position in the aftermarket if her rival won at a relatively low price so it can be common knowledge that in equilibrium a weak bidder will win the auction and even without uncertainty about relative valuations resale will take place the possibility of reselling to a strong bidder attracts weak bidders to participate in the auction and raises the seller s revenue

optimal bid disclosure in patent license auctions under alternative modes of competition abstract the literature on patent license auctions in oligopoly assumed that the auctioneer reveals the winning bid and stressed that this gives firms an incentive to bid high in order to signal an aggressive output strategy in a downstream cournot market game and conversely bid low to signal acquiescent pricing in a bertrand market game the present paper examines the information revealed by publishing the winning or the losing or no bid assuming an oligopoly with differentiated goods we rank disclosure rules and find that it is not optimal for the innovator to disclose the winning bid regardless of the mode of competition

some estimates of the price and income elasticities of import demand for three caribbean countries this paper provides estimates of the short run and long run price and income elasticities of import demand for three developing economics the econometric evidence confirms that devaluation is an appropriate policy to correct for balance of payments disequilibrium in the caribbean and it supports the imf stabilization approach

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

low revenue equilibria in simultaneous ascending bid auctions low revenue equilibria allow participants in an auction to obtain goods at prices lower than would prevail in a competitive market these outcomes are generated as perfect equilibria of ascending bid multiunit auctions we show that these equilibria are possible under mild conditions conditions that are likely to prevail in many situations where auction formats have recently been adopted we argue that these equilibria could explain the low revenues of some recent auctions and discuss potential remedies to eliminate low revenue equilibria

common long range dependence in a panel of hourly nord pool electricity prices and loads abstract equilibrium electricity spot prices and loads are often determined simultaneously in a day ahead auction market for each hour of the subsequent day hence daily observations of hourly prices take the form of a periodic panel rather than a time series of hourly observations we consider novel panel data approaches to analyse the time series and the cross sectional dependence of hourly nord pool electricity spot prices and loads for the period 2000 2013 hourly electricity prices and load data are characterized by strong serial long range dependence in the time series dimension in addition to strong seasonal periodicity and along the cross sectional dimension i e the hours of the day there is a strong dependence which necessarily has to be accounted for in order to avoid spurious inference when focusing on the time series dependence alone the long range dependence is modelled in terms of a fractionally integrated panel data model and it is shown that both prices and loads consist of common factors with long memory and with loadings that vary considerably during the day due to the competitiveness of the nordic power market the aggregate supply curve approximates well the marginal costs of the underlying production technology and because the demand is more volatile than the supply equilibrium prices and loads are argued to identify the periodic power supply curve the estimated supply elasticities are estimated from fractionally co integrated relations and range between 0 5 and 1 17 with the largest elasticities being estimated during morning and evening peak hours