the welfare effects of deregulatin producer prices a method is presented for examining producer welfare impacts of a range of deregulation proposals including a reduction in price support welfare impacts take account not just of expected transfer effects but of changes in the uncertain conditions facing producers the method is applied to deregulation proposals for the australian wheat industry results suggest producers would benefit under some proposals but be made worse off under others supply responses also are estimated and shown to be generally smaller in percentage terms than are short run welfare effects it is argued that short run and long run welfare effects are similar

optimal market pools for agricultural cooperatives most agricultural marketing cooperatives distribute members net revenues on a pool basis the present paper outlines various pool options and provides a framework for identifying privately and collectively optimal pooling rules individual members pool choices are found to vary according to farm enterprise and risk aversion level a collectively optimal rule depends generally on risk aversion and on the method used to aggregate individuals expressed preferences in the instance examined here however the collective optimum is somewhat insensitive to assumed risk aversion

the rationale of the mean standard deviation analysis skewness preference and the demand for money publisher summary this chapter discusses the rationale of the mean standard deviation analysis skewness preference and the demand for money in january 1969 issue of the review of economic studies karl borch and martin feldstein separately criticized the widely used mean variance analysis of portfolio selection borch contended that any system of upward sloping mean standard deviation e s indifference curves can be shown to be inconsistent with the basic axiom of choice under uncertainty he pointed out that one can always pick any two points on an upward sloping indifference curve to represent two bernoulli distributions with probability 1 p of gaining the same amount x in both the cases and probability p of gaining y1 in the case of one distribution and y2 in the case of the second distribution with y2 y1 if the second distribution represents the point to the northeast of the other point then by the dominance axiom the second distribution must be preferred to the first which contradicts the basic meaning of indifference curves feldstein by using a log utility function and a lognormal distribution for investment outcome showed that e s indifference curves for a risk averter need not be convex downwards though upward sloping they would change from convex to concave once the standard deviation of the outcome exceeds the mean multiplied by on the face of it this seems to suggest that risk aversion might decrease as risk is increased beyond a certain extent

decision making in committees transparency reputation and voting rules in this paper i analyze the effect of the transparency of the decision making process in committees on the decisions that are eventually taken i focus on committees whose members are motivated by career concerns so that each member tries to enhance his own reputation when the decision making process is secretive the individual votes of the committee members are not exposed to the public but only the final decision thus individuals are evaluated according to the group s decision i find that in such a case group members are induced to comply with preexisting biases for example if the voting rule demands a supermajority to accept a reform individuals vote more often against reforms and exacerbate the conservatism of the voting rule when the decision making process becomes transparent and individual votes are observed this effect disappears and such committees are then more likely to accept reforms i also find that coupled with the right voting rule a secretive procedure may induce better decisions than a transparent one

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

asymmetric auctions with resale an experimental study we study auctions with resale based on hafalir and krishna s 2008 6 model as predicted weak bidders bid more with resale than without so that average auction prices tend to increase when the equilibrium calls for weak types to bid higher than their values with resale they do but not nearly as much as the theory predicts in other treatments outcomes are much closer to the risk neutral nash model s predictions bid distributions for weak and strong types are more similar with resale than without in line with the theory

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

understanding retained patronage refunds in agricultural cooperatives the share of patronage refunds retained by an agricultural cooperative is modeled as arising from the portfolio decision of its median member the member is viewed as maximizing expected utility by allocating wealth between investments in farming assets and equity in the cooperative determinants of the share of patronage refunds retained are the expected rates of return on these two investments their variances their covariance and the expected future share of patronage and its variance empirical examinations of aggregate cooperative data and cross section analysis of seventeen regional supply cooperatives are found to be consistent with the model

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

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

auctions with resale opportunities an experimental study we study first price asymmetric private value auctions with resale opportunities presented in seller s and buyer s markets we offer experimental evidence on bidding behavior prices and resource allocation building upon the hafalir and krishna 2008 model we find that bidders will bid higher in an auction if the resale market is a seller s market than a buyer s market there is a price revenue efficiency trade off established theoretically between these two resale regimes in equilibrium however final efficiency is high irrespective of the resale market structure evidence of bid symmetrization and higher final efficiency is found in the buyer advantaged resale case jel d44 c92

participation in farm commodity programs a stochastic dominance analysis grube correctly argues that mini max and maximax criteria can help analysts determine the interval in which for a given set of preferences there will be changes in the preferred distribution the criteria is of less value when simulations are used to generate distributions without exact a priori knowledge of the random draw of order statistics we will argue that in most cases one can go even further and solve for the specific break even level of risk aversion this should simplify the procedures commonly used to rank risky prospects the author calculates that for the data presented the mini max critical value is 0 000003 for risk preferrers and 0 000002 for risk avoiders he concludes that these are low values when compared to the range originally considered 0 04 to 0 03 since his numbers fall within our range this suggests that our range could have been narrower than it was but clearly our range did contain the values he calculated it is noteworthy that when the smaller coefficients were used the relative rankings of choices remained unchanged grube concludes that kp s results are correct in the sense that they give a correct ranking of the order in which alternatives would be chosen by decision makers with varying absolute risk aversion coefficients since ultimately risk analysts are interested in the relative ranking of risky prospects this would suggest that our results are more robust than the author implies in his remarks while grube has suggested a means of identifying the interval of interest we would argue that in many cases one could go further and solve for the break even level of risk preference the break even level would be that value at which there is a switching in the dominance of one distribution over another using results developed by hammond it should be possible to simplify both the calculation and presentation of stochastic dominance results by solving for the break even level two conditions must be satisfied in order to apply hammond s results first constant risk aversion must be assumed while the use of utility functions exhibiting decreasing risk aversion has been advocated in the theoretical literature and supported somewhat by empirical studies which have assessed utility functions in most applications constant risk aversion is assumed this is largely because wealth data is frequently unavailable or of questionable accuracy thus risk analysts typically assume that a decision maker s utility function can be approximated over the relevant range by a constant risk aversion function such as the negative exponential function u x 1 e ax

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

experimental evidence on the performance of emission trading schemes in the presence of an active secondary market as auction based emission trading schemes ets become more common in addressing climate change it is of interest to study the effects of bargaining power in resale markets on original as well as post resale allowance allocations in terms of prices and efficiency this article provides an experimental study of first price private value asymmetric auctions followed by a double auction resale market opportunity we compare the double auction to other resale regimes with an uneven distribution of market power and contrast initial bids resale prices and efficiency despite the conventional wisdom that full efficiency requires the absence of market power we find that double auction resale markets lead to lower efficiency than the monopsony resale regime the level of efficiency achieved however is close to the highest across mechanisms that have differential bargaining power at the resale stage

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

cost pooling in australian grain handling a common property analysis the common property analysis of rausser zusman and foster is expanded and applied t australian grain transportation systems with a conservative decision rule a statically inefficient cost pooling system may lead to optimal investment decisions as benefits become pooled with ramsey pricing in contrast losers may veto many investment decisions so that allocations become equitable but technically inefficient efficiency gains from price policy reform may not be achieved unless accompanied by property right reallocation

pivotality and responsibility attribution in sequential voting this paper analyzes responsibility attributions for outcomes of collective decision making processes in particular we ask if decision makers are blamed for being pivotal if they implement an unpopular outcome in a sequential voting process we conduct an experimental voting game in which decision makers vote about the allocation of money between themselves and recipients without voting rights we measure responsibility attributions for voting decisions by eliciting the monetary punishment that recipients assign to individual decision makers we find that pivotal decision makers are punished significantly more for an unpopular voting outcome than non pivotal decision makers our data also suggest that some voters avoid being pivotal by voting strategically in order to delegate the pivotal vote to subsequent decision makers

bidding behavior in asymmetric auctions an experimental study abstract we review an asymmetric auction experiment based on plum int j game theory 20 1992 393 private valuations of the two bidders are independently drawn from distinct but commonly known distributions one of which first order stochastically dominates the other we test the qualitative properties of that model of asymmetric auctions in particular whether the weak bidder behaves more aggressively than the strong and then test bidders preference for first vs second price auctions

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

entitlements and distributive equity in cooperative marketing pools abstract inter member allocation of marketing pool income is contingent on the rule used for valuing members raw product contributions such valuations depend in turn upon forecasts of the raw product s resale net returns an entitlement based notion of a pool s distributive equity which generally differs from a welfare based notion is expressed weakly in the expectations domain or more strongly in expectations and variance domains valuing raw products according to unbiased unit return forecasts may or may not guarantee weak form equity if weak equity is not guaranteed strong equity is assessed only in reference to a loss function in any event improved equity may involve increased information cost

voting when money and morals conflict an experimental test of expressive voting abstract moral considerations may matter much in voting because the costs of expressing support for a morally worthy cause may be low in a referendum these costs depend on whether a voter expects to affect the outcome of the referendum to test the low cost theory of expressive voting we experimentally investigate a proposal to tax everyone and to donate tax revenues the analysis of expectations and voting decisions shows that the low cost theory fails to explain voting decisions instead we find that voters tend to approve of the proposal if they expect others to approve too

notes and comments the amsterdam auction the amsterdam auction has been used to sell real estate in the dutch capital for centuries by awarding a premium to the highest losing bidder the amsterdam auction favors weak bidders without having the implementation difficulties of myerson s 1981 optimal auction in a series of experiments we compare the standard first price and english auctions the optimal auction and two variants of the amsterdam auction with strongly asymmetric bidders the second price amsterdam auction raises substantially more revenues than standard formats and only slightly less than the optimal auction

efficiency in auctions with failed resale abstract the possibility of resale affects efficiency in multi object uniform price auctions with asymmetric bidders we theoretically show that when the exogenous probability of a resale market is sufficiently low final efficiency is lower than in an auction without resale our experimental design consists of four treatments that vary the probability that bidders participate in a resale market resale always increases efficiency compared to the auction allocation but it also induces demand reduction by high value bidders which reduces auction efficiency consistent with theory and in contrast to what is usually argued the possibility of resale may reduce final efficiency and changes in the probability of resale have a non monotonic effect on efficiency we also analyze bargaining chat data to provide insights into the functioning of resale markets