steam as a general purpose technology a growth accounting perspective the contribution of steam to british economic growth in the nineteenth century is estimated using growth accounting methods similar to those recently employed to examine the role of ict the results indicate that steam contributed little to growth before 1830 and had its peak impact about a hundred years after watt s famous invention only with the advent of highpressure steam after 1850 did the technology realise its potential compared with ict steam s impact on the annual rate of growth was modest it is unlikely that these conclusions are vulnerable to quantification of hitherto unmeasured tfp spillovers

insider trading revisited a recent article in this journal argued that insider trading is an unethical practice leading to an inefficiently functioning market the debate on this topic has primarily pitted ethical defenses of prohibition against economic arguments extolling its allowance in addition to being incomplete this approach ignores other unwanted economic effects of prohibition itself and unethical implications of its existence this article shows that adam smith s free market concept when properly interpreted provides all the incentive structure necessary for an efficient and ethical marketplace even when insider trading is permitted

can a carbon trading system promote the transformation of a low carbon economy under the framework of the porter hypothesis empirical analysis based on the psm did method abstract global warming is one of the issues of great concern in the world the large scale use of fossil fuels has led to the continuous increase in carbon emissions resulting in global energy shortages and environmental pollution reasonable and strict environmental regulation promotes technological innovation by enterprises to achieve a win win situation between the economy and environment which is the core idea of the porter hypothesis the choice of china as the world s largest energy consumer and carbon emitter is not only related to the country s own mode of economic growth but also determines the development of the world s low carbon economy we used the panel data from 2000 to 2016 of 30 provincial level administrative regions in china and adopted the propensity score matching difference in differences method to test the impact of china s carbon trading pilot system on the transformation of a low carbon economy the empirical results show that under the constraints of the established resources and environment there is a positive relationship to some extent between china s carbon trading system and low carbon economic transformation this relationship can realize the win win situation of environmental and economic benefits as advocated by the porter hypothesis and further verify the applicability of the porter hypothesis

how trading institutions affect financial market performance some laboratory evidence i introduction trading institutions vary considerably across contemporary financial markets 1 but most can be classified into one of two basic types the continuous double auction da allows traders to submit public offers to buy or to sell and to accept other traders offers at any moment in time the double auction institution offers immediacy but non uniform transaction prices the other basic trading institution the clearinghouse ch gathers offers and clears them at a unified price at a pre specified time it sacrifices immediacy for uniform transaction prices 2 the two types of institutions have co existed and evolved for centuries but now are emerging in new electronic versions market participants and policy makers would like to know which institution or variant or combination is most efficient but theoretical and empirical work to date provides little guidance this paper reports on a series of laboratory asset markets experiments designed to compare variants of the double auction and clearinghouse trading institutions the markets are small usually with eight or nine traders but the traders are profit motivated and experienced with the trading institutions the traded asset has uncertain market value and traders receive useful but inconclusive private information they can only learn the asset s true value during the course of trade laboratory markets offer several advantages for empirical study of financial market institutions first private information is observable even controllable in the laboratory and therefore the investigator can directly measure market efficiency 3 second the complexity of the environment can be varied systematically in the laboratory and its effects on market performance can be separated from the effects of the market institution and other forces finally the market institution itself is controllable in the laboratory so it is possible to make valid causal inferences on how the market institution shapes market performance i begin with a survey of relevant literature and other preliminaries in the rest of this section section ii outlines the laboratory procedures the creation of trading environments of varying complexity the electronic implementation of the clearinghouse and double auction trading institutions the computation of theoretical benchmark prices and allocations and the measurement of market performance section iii collects the results following an illustrative account of a double auction trading period and a clearinghouse trading period i use descriptive statistics to summarize market performance in each of the thirty nine experiments the main conclusions are based on statistical comparisons of market performance across alternative market institutions the clearinghouse institution does surprisingly well it delivers greater market depth than the double auction discovers prices at least as efficiently and produces final allocations almost as efficient as the double auction the main institutional variants examined in this paper concern the amount of information made public regarding order placement orderflow the data suggest that public display of the orderflow enhances double auction efficiency but may impair clearinghouse efficiency a study of trading volume shows higher volume in the double auction in both institutions volume increases when important private news arrives and when the trading period is about to end the paper concludes with a brief summary and discussion of the results a companion paper friedman 1991 considers the effects of awarding various privileges to some but not all traders copeland and friedman 1987 1991 provide useful background information on laboratory procedures and computerized double auction markets instructions for the current experiments are available on request the need for empirical work a skeptic might argue that empirical work is unnecessary the mere fact that the double auction and clearinghouse institutions both persist in major financial markets implies that both are highly efficient because a more efficient institution would displace less efficient institutions

the effects of changes of the job offer arrival rate on the duration of unemployment generally it is acknowledged that changing the job offer arrival rate has two opposite effects on unemployment duration for a basic job search model sufficient conditions on the wage offer distribution have been derived ensuring that one of the effects dominates however these are not satisfied for the popular families of wage offer distributions here i show that the conditions can be weakened at virtually no cost the set of distributions satisfying the new conditions is considerably larger than the set previously established in particular it includes all wage offer distribution families that are popular in structural empirical research

a coevolutionary framework for analysing a transition to a sustainable low carbon economy this paper proposes a coevolutionary framework for analysing a transition to a sustainable low carbon economy based on the coevolution of ecosystems technologies institutions business strategies and user practices within a multi level micro meso macro perspective this builds on and develops previous coevolutionary analyses of long term technological and industrial change and recent renewed interest within ecological economics on coevolutionary approaches previous work has analysed how the coevolution of technologies and institutions has led to the lock in of current high carbon energy systems and how the coevolution of physical and social technologies and business strategies has brought significant material and welfare benefits to the minority of the world s population living in industrialised countries the coevolutionary framework proposed here may be used to undertake 1 detailed empirical analyses at a micro meso level of the challenges relating to the innovation and adoption of particularly low carbon technologies 2 as a framework for analysing the multi level interaction of social and technological elements within potential transition pathways to a low carbon energy system 3 to assess the implications for economic growth and prosperity of a transition to a low carbon economy and 4 to assist in the development of more formal multi level evolutionary economic models

regulating technological change the strategic reactions of utility companies towards subsidy policies in the german spanish and uk electricity markets abstract this paper focuses on how incumbent electric utilities strategically react to subsidy schemes supporting renewable energy technologies in the uk germany and spain firms coordinate the development of their technological capabilities and their political activities to shape their regulatory environment analysing the diffusion of wind power in these countries we show that the different ways in which firms coordinate their technological and political strategies lead to very different market outcomes both for the firms market share and the size of the overall market although incumbents are usually seen as being resistant to change in energy systems we show that spanish utilities proactively drive the diffusion of wind power we speculate about the relation between the ownership structure of the energy system and its inertia with respect to the integration of new technologies we derive novel policy implications that explicitly take into account the strategic actions of incumbent firms shaping the technological and regulatory system

five centuries of energy prices concerns about rising energy prices tend to occur in times of economic expansion to disappear in times of recession a recurring fear is that in the long run real energy prices will trend upwards this paper presents evidence from five hundred years of prices of energy sources for the united kingdom over this time period there is little support for any general trend of rising fuel prices and some evidence of significant declines using this information on prices and consumer expenditure to weight the series an average price of energy series has been created reflecting the substitution away from more scarce fuels driving prices down and towards more valuable ones driving prices up over more than five hundred years and albeit with significant long lived fluctuations there seems little evidence of a rising long run trend in the real price of energy

insider trading outside search and resource allocation why firms and society may disagree on insider trading restrictions we show that entrepreneurs may prefer to allow insider trading even when it is not socially optimal we examine a model in which an insider manager allocates resources on the basis of his private information and outside information conveyed through the secondary market price of the firm s shares if the manager is allowed to trade he will compete with informed outsiders reducing the equilibrium quality of outside information while the benefits to production of outside information are the same for society and entrepreneurs we show that the social and private costs are different thus entrepreneurs and society may disagree on the conditions under which insider trading restrictions should be imposed article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

introduction to the stability of rational expectations equilibrium abstract this paper surveys the literature which examines the stability of the expectations that agents are assumed to have in a rational expectations equilibrium ree this issue is more complex than the usual statistical estimation problem because the relationship between observable variables and payoff relevant variables is endogenous one approach taken in the literature yields convergence to a ree but requires agents to have extensive knowledge about the structure and dynamics of the model that prevails while they learn a second approach does not assume that agents have correctly specified likelihood functions and finds that ree may not be stable

the unstudied barriers to widespread renewable energy deployment fossil fuel price responses abstract renewable energy policy focuses on supporting the deployment of renewable power generators so as to reduce their costs through scale economies and technological learning it is expected that once cost parity with fossil fuel generation is achieved a transition towards renewable power should continue without the need for further renewable energy subsidies however this reasoning implicitly assumes that the cost of fossil fuel power generation does not respond to the large scale penetration of renewable power in this paper we build a standard economic framework to test the validity of this assumption particularly in the case of coal and gas fired power generation we find that it is likely that the cost of fossil fuel power generation will respond to the large scale penetration of renewables thus making the renewable energy transition slower or more costly than anticipated more analysis is needed in order to be able to quantify this effect the occurrence of which should be considered in the renewable energy discourse

where should the line be drawn on insider trading ethics finance ethics have drawn increasing attention from both government regulators and academic researchers this paper addresses the issue of insider trading ethics previous studies on insider trading ethics have failed to provide convincing arguments and consistent results in particular the arguments against insider trading are based primarily on moral and philosophical grounds and lack empirical rigor this study intends to establish and examine the relationship between the ethical issue and economic issue of insider trading we argue that the ethics of insider trading is in essence an economic rather than a moral issue it is so far not clear to what extent insider trading may increase or decrease shareholders wealth until then we must take care to avoid over regulating insider trading

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

rational expectations and the aggregation of diverse information in laboratory security markets the idea that markets might aggregate and disseminate information and also resolve conflicts is central to the literature on decentralization hurwicz 1972 and rational expectations lucas 1972 we report on three series of experiments all of which were predicted to have performed identically by the theory of rational expectations in two of the three series one in which participants trade a complete set of arrow debreu securities and a second in which all participants have identical preferences double auction trading leads to efficient aggregation of diverse information and rational expectations equilibrium failure of the third series to exhibit such convergence demonstrates the importance of market institutions and trading instruments in achievement of equilibrium

market for information experimental evidence predictions of the noisy rational expectations equilibrium ree model are found to be relatively accurate for both asset and information markets in the laboratory when information about an asset s uncertain dividend is sold to a fixed number of highest bidders prices allocations efficiency and distribution of profit predictions of the full revelation ree model in the asset market dominate the predictions of the walrasian model demand for information shifts to the left and its price declines close to zero when the price of information is fixed at a relatively high level the number of informed agents and the informativeness of the asset market tends to adjust to permit the informed agents to recover their investment in information

identification results for duration models with multiple spells the purpose of this paper is to investigate the identifiability of duration models with multiple spells we prove that the results of elbers and ridder 1982 and heckman and singer 1984 can be generalized to multi spell models with lagged duration dependence we also prove that without lagged duration dependence the identification result does not depend on moment conditions or tail conditions on the mixing distribution this result is in contrast to ridder s 1990 result for single spell models

shareholder wealth maximization business ethics and social responsibility the primary objective of this article is to develop a framework for analyzing the ethical foundations and implications of shareholder wealth maximization swm distinctions between swm and the more widely examined construct of profit maximization are identified the most significant being the central role played in swm by the market mechanism for pricing the corporation s securities it is argued that empirical tests concerned with evaluating the ethical implications of swm will almost surely involve a joint hypothesis a number of recent empirical studies aimed at testing hypotheses with explicit ethical content are reviewed

the role of ethics in finance the role of ethics in the financial community today seems to be limited to its role in financial economic theory contemporary financial economists view ethics in the context of objective wealth maximization in this context ethics functions primarily as a constraint on behavior this view is both illogical and ambiguous it is illogical because it may actually sanction unethical behavior if such behavior can be shown to lead to material gain it is ambiguous because throughout he 2000 year history of moral philosophy ethics has generally been viewed as a behavioral motivation not as a constraint if a conception of ethics as the fundamental objective in all human endeavor is disseminated in the financial community there is real hope that ethics will be accepted as both logically consistent and desirable

ma and sun on insider trading ethics ma and sun have recently argued that some forms of insider trading are ethically acceptable we argue that the authors fail to prove three key premises of their argument which is therefore unsound

the ethics of insider trading despite the fact that a number of economists and philosophers of late defend insider trading both as a viable and useful practice in a free market and as not immoral i shall question the value of insider trading both from a moral and an economic point of view i shall argue that insider trading both in its present illegal form and as a legalized market mechanism undermines the efficient and proper functioning of a free market thereby bringing into question its own raison d etre it does so and is economically inefficient for the very reason that it is immoral thus this practice cannot be justified either from an economic or a moral point of view

increasing returns path dependence and the study of politics it is increasingly common for social scientists to describe political processes as path dependent the concept however is often employed without careful elaboration this article conceptualizes path dependence as a social process grounded in a dynamic of increasing returns reviewing recent literature in economics and suggesting extensions to the world of politics the article demonstrates that increasing returns processes are likely to be prevalent and that good analytical foundations exist for exploring their causes and consequences the investigation of increasing returns can provide a more rigorous framework for developing some of the key claims of recent scholarship in historical institutionalism specific patterns of timing and sequence matter a wide range of social outcomes may be possible large consequences may result from relatively small or contingent events particular courses of action once introduced can be almost impossible to reverse and consequently political development is punctuated by critical moments or junctures that shape the basic contours of social life

globalizing carbon lock in this paper extends the arguments surrounding carbon lock in elaborated in unruh energy policy 28 2000 817 30 2002 317 to countries currently undergoing industrialization it argues that for numerous reasons industrializing countries are unlikely to leapfrog carbon intensive energy development on the contrary carbon lock in may be globalizing and could further constrain climate change mitigation options it is then argued that many policy recommendations ignore carbon lock in possibly limiting their potential for successful implementation the paper then discusses four policy approaches that appear to have advantages given lock in conditions it is recognized however that relative ease of implementation does not necessarily equate with superiority instead it is merely a path dependent outcome of past development decisions pursuing policies on the basis of relative implementation ease may help address the issue of climate change but could also result in sub optimal outcomes along other dimensions of sustainable development

market behavior in the presence of divergent and imperfect private information experimental evidence from canada china and the united states abstract we conduct 27 asset markets to examine market behavior when traders have divergent and imperfect information each market consists of well informed wi and less informed li agents nine markets each are conducted in canada china and the us we find that wi agents private information is partially but not fully reflected in prices we also document cross country differences in the degree to which private information is reflected in prices lastly we find that wi agents are able to exploit their informational advantage and outperform li agents this result holds across countries

the rebound effect microeconomic definitions limitations and extensions abstract the rebound effect results in part from an increased consumption of energy services following an improvement in the technical efficiency of delivering those services this increased consumption offsets the energy savings that may otherwise be achieved if the rebound effect is sufficiently large it may undermine the rationale for policy measures to encourage energy efficiency the nature and magnitude of the rebound effect is the focus of long running dispute with energy economics this paper brings together previous theoretical work to provide a rigorous definition of the rebound effect to clarify key conceptual issues and to highlight the potential consequences of various assumptions for empirical estimates of the effect the focus is on the direct rebound effect for a single energy service indirect and economy wide rebound effects are not discussed beginning with khazzoom s original definition of the rebound effect we expose the limitations of three simplifying assumptions on which this definition is based first we argue that capital costs form an important part of the total cost of providing energy services and that empirical studies that estimate rebound effects from variations in energy prices are prone to bias second we argue that energy efficiency should be treated as an endogenous variable and that empirical estimates of the rebound effect may need to apply a simultaneous equation model to capture the joint determination of key variables third we explore the implications of the opportunity costs of time in the production of energy services and highlight the consequences for energy use of improved time efficiency the influence of time costs on the rebound effect and the existence of a parallel rebound effect with respect to time each of these considerations serves to highlight the difficulties in obtaining reliable estimates of the rebound effect and the different factors that need to be controlled for we discuss the implications of these findings for econometric studies and argue that several existing studies may overestimate the magnitude of the effect

information technology and screen based securities trading pricing the stock and pricing the trade many major stock exchanges rely on their member firms to act as dealer intermediaries risking their own capital to trade as dealers with investor customers a confluence of forces will dramatically alter the role of these intermediaries and the strategies available to them information technology is increasing the diversity of trading strategies used by investors these impose different costs and risks upon intermediaries alternative electronic trading venues off exchange trading systems are increasing the competition faced by established exchanges and have been especially effective in targeting investors who impose low risks upon intermediaries finally many of the automated systems developed by existing exchanges have stripped of many of the cues that have in the past been used by intermediaries to assess the riskiness of an investor s trade and to price accordingly we believe that competitive pressure from alternative trading venues will drive exchanges to develop mechanisms to support risk based pricing we explore through a stylized model of trading how the use of risk based pricing can preserve the established central market this enables intermediaries to separate pricing the shares traded from pricing the services for dealing these shares and provides low cost execution while preserving the benefits of intermediation our model uses a detailed computer simulation in which dealers interact with order flow to produce a sequence of trades which determine market prices which in turn influence order flow the model enables us to calculate trading costs for different classes of investor various other standard measures of market quality and market maker profitability

analyzing insider trading from the perspectives of utilitarian ethics and rights theory the common view is that insider trading is always unethical and illegal but such is not the case some forms of insider trading are legal furthermore applying ethical principles to insider trading causes one to conclude that it is also sometimes ethical this paper attempts to get past the hype the press reports and the political grandstanding to get to the truth of the matter the author applies two sets of ethical principles utilitarianism and rights theory in an attempt to determine when and in what circumstances insider trading is ethical the views of henry manne an early proponent of insider trading are critically examined as are the major arguments against insider trading is insider trading good for the company if it is used as a form of executive compensation which makes it possible to pay lower salaries than would otherwise be the case does insider trading cause the stock market to work more efficiently if insider trading does increase efficiency is that sufficient to call for its total legalization or are there other things to be considered several arguments against insider trading have been put forth over the last few decades but there are problems with all of them one of the main arguments is the fairness argument the problem with this argument is that different people have different definitions of unfairness a closely related argument is the level playing field argument which advocates wider dissemination of information so that it is less asymmetric one problem with the level playing field argument is that it is better applied to sporting competitions than to trading in information some economists argue that forcing the disclosure of nonpublic information can actually result in more harm than good and must necessarily involve the violation of property rights other arguments examined in this chapter include the fiduciary duty argument the problem of outside traders the misappropriation doctrine and the restrictions that insider trading laws place on freedom of speech and press the article concludes by setting forth some principles or guidelines to determine when insider trading should be punished and when it should not

rewards experience and decision costs in first price auctions consistent with a model of asymmetric risk aversion subjects in first price auctions consistently bid above the risk neutral nash prediction it has been argued that this is due to low opportunity cost of deviating from the risk neutral bid we increase opportunity cost and payoff levels by factors of 0 1 5 10 and 20 from the normal levels generating payoffs up to 250 for risk neutral subjects and observe an insignificant increase in the slope of individual bid functions the rmse of bids declines significantly this is consistent with a reward decision cost model of bidding behavior

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

monetary rewards and decision cost in experimental economics a survey of thirty one experimental studies which report data on the comparative effects of monetary rewards and opportunity cost shows 1 several studies in which increased rewards shift the central tendency of the data toward the predictions of rational models 2 in virtually all cases rewards reduce the variance of the data around the predicted outcome this is consistent with a model in which rewards are balanced against decision cost in agent behavior and explicates the argument that when rational models fail it can be attributed to low opportunity cost of deviations from the rational prediction

a dynamic model of expectations equilibrium abstract this paper describes a dynamic information adjustment process which achieves rational expectations equilibria for stochastic exchange environments an informational temporary equilibrium is an exchange equilibrium in which agents expectations are conditioned on their initial information and market data generated in previous informational temporary equilibria an equilibrium is a temporary equilibrium which reveals no further information this process leads to an equilibrium even when the data observed by agents is insufficient to permit the existence of an expectations equilibrium

an experiment testing the determinants of non compliance with insider trading laws recent stories of corporate insiders avoiding losses and in some cases generating enormous personal profits as their companies crumbled have led investors to question the integrity of american business and the fairness of the united states stock markets the sec tries to ensure the fairness of the stock markets by making and enforcing laws against unfair practices such as insider trading in the united states when insiders trade stock based on non public information they have broken the law and betrayed the trust that has been placed in them

a low carbon industrial revolution insights and challenges from past technological and economic transformations recent efforts to promote a transition to a low carbon economy have been influenced by suggestions that a low carbon transition offers challenges and might yield economic benefits comparable to those of the previous industrial revolutions this paper examines these arguments and the challenges facing a low carbon transition by drawing on recent thinking on the technological economic and institutional factors that enabled and sustained the first british industrial revolution and the role of general purpose technologies in stimulating and sustaining this and subsequent industrial transformation processes that have contributed to significant macroeconomic gains these revolutions involved profound long drawn out changes in economy technology and society and although their energy transitions led to long run economic benefits they took many decades to develop to reap significant long run economic benefits from a low carbon transition sooner rather than later would require systemic efforts and incentives for low carbon innovation and substitution of high carbon technologies we conclude that while achieving a low carbon transition may require societal changes on a scale comparable with those of previous industrial revolutions this transition does not yet resemble previous industrial revolutions a successful low carbon transition would however amount to a different kind of industrial revolution

efficiency of experimental security markets with insider information an application of rational expectations models the study reports on the ability of competing models of market information integration and dissemination to explain the behavior of simple laboratory markets for a one priced security returns to the security depended upon a randomly drawn state of nature some agents insiders whose identity was unknown to other agents knew the state before the markets opened with replication of market conditions the predictions of a fully revealing rational expectations model are relatively accurate prices adjusted immediately to near rational expectations prices profits of insiders were virtually indistinguishable from non insiders and efficiency levels converged to near 100 percent

insider trading in a rational expectations economy it is often argued that efficiency considerations require society to freely permit insider trading in this article an opposing efficiency argument is formalized the model incorporates an investment stage followed by a trading stage if outsiders expect insiders to take advantage of them in trading outsiders will reduce their investment the insiders loss from this diminished investor confidence may more than offset their trading gains consequently a prohibition on insider trading may effect a pareto improvement insiders are made better off if they can precommit not to trade on their privileged information govemment regulation accomplishes exactly this jel 022 026 313 the traditional rationale articulated for insider trading regulation and other securities law is that such rules promote confidence in markets indeed president franklin d roosevelt justified the first major u s securities legislation by saying it should give impetus to honest dealing in securities and thereby bring back public confidence similar language is still invoked half a century later in connection with enforcement efforts against insider trading and in proposals for tightened stock

the ethics of insider trading revisited following manne 1966 insider trading and the stock market new york free press we introduce a distinction between insider trading and market manipulation on the one hand and corporate insiders versus misappropriators on the other hand this gives rise to four types of alleged inside transactions we argue that the literature on insider trading has often targeted inside transactions type ii iii and iv but that these arguments do not necessarily hold for type i transactions we look for consequentionalist as well as non consequentionalist arguments against type i transactions and demonstrate that these are hard to find throughout the article we refer extensively to the economic literature on insider trading in order to overcome a relative divide between the economic legal and philosophical discussion on insider trading

price conveyed information versus observed insider behavior a note on rational expectations convergence in a recent paper on behavior in experimental securities markets plott and sunder 1982 concluded that the rational expectations re model was superior to the traditional prior information pl model in predicting equilibrium prices and holdings in particular given a market with one commodity three possible states of the world and three groups of trader types each with differing valuations on the commodity per state initially uninformed traders were able to infer the underlying state from the current market price and act accordingly in a related paper friedman harrison and salmon 1984 observed that given the existence of a futures market the re model outperformed the pi model in multiperiod single commodity markets as well one source of potential misinterpretation however comes from the fact that although one half of the traders of each type were informed of the true state at the beginning of each period in plott and sunder 1982 and one third of the traders of each type in friedman harrison and salmon 1984 the same traders were informed in almost every period in a more recent paper plott and sunder 1983 constructed markets where all traders received partial information i e given possible states x y and z a trader s private information would be either not x or not y if the state were z yet the combinations of traders receiving a certain message in any period were determined randomly

using a structural form model to analyze the impact of home ownership on unemployment duration summary it is often found that the impact of home ownership on the hazard rate for leaving unemployment is positive indicating that home ownership helps workers to leave unemployment for a paid job however little emphasis has been given to how such a relationship can be explained this paper estimates a structural form model that allows for self selection into home ownership and the risk of home owners losing their property during a spell of unemployment we find a substantial amount of self selection using indirect inference based on a mixed proportional hazards rate model and find virtually no impact of home ownership on individual labor market performance copyright 2016 john wiley sons ltd

long term diversification paths and energy transitions in europe the concentration of the energy mixes of eight european countries is measured latecomers historically enjoyed lower levels of concentration in their energy mixes early comers followed an inverted u path of concentration latecomers a u path a time effect and size effect explains the different patterns small energy consuming countries will be able to do faster transitions

analysing incomplete individual employment histories using indirect inference in this paper we apply the indirect inference method to estimate the parameters of a semi markov transition model when the data are subject to a complex form of censoring there is no explicit expression for the likelihood function and therefore maximum likelihood estimation is computationally burdensome the econometric methodology of indirect inference is first tested on simulated data under various assumptions about the distribution of spell durations and transitions then it is applied to labour market transitions between self employment wage work and unemployment using the 1986 1988 french labour force survey although the analysis is basically a reduced form analysis we motivate our transition model in terms of a structural search model

effective climate energy solutions escape routes and peak oil abstract many well intended climate energy strategies are ineffective in the absence of serious environmental regulation this holds among others for direct support of clean energy voluntary energy conservation technical standards on a limited set of products unilateral stringent carbon pricing and awaiting peak oil as a climate strategy all of these suffer from escape routes that indirectly increase co2 emissions and thus make the original strategy ineffective on the other hand environmental regulation alone may lead to a myopia bias stimulating early dominance of cost effective technologies and a focus on incremental innovations associated with such technologies rather than on radical innovations although adopting a partial viewpoint keeps the analysis simple we urgently need a more inclusive systems perspective on climate solutions this will allow the formulation of an effective climate policy package that addresses the various escape routes

information dissemination and the distribution of wealth evidence from experimental asset markets abstract we conduct 24 experimental asset markets to investigate the effects of differentially informed and experienced agents on information dissemination and the distribution of wealth in our markets private information is incomplete in that it reduces but does not eliminate state uncertainty private information is not fully disseminated even in markets with experienced traders informed agents exploit their informational advantage and earn greater profit than uninformed agents but only in markets with inexperienced traders lastly uninformed agents earn greater profit when some agents are informed but only in markets with experienced traders overall uninformed agents benefit from design specific trading experience

the market value of information some experimental results the authors examine the price and allocation of purchased information and of the underlying asset in eight double auction asset market experiments observed outcomes support fully revealing rational expectations in simple environments in which uninformed traders can easily infer the private information of informed traders but support nonrevealing rational expectations in more complex environments the private value of information is positive in the more complex noisy environments but competition forces the information price to its nash equilibrium value and the net gain by purchasers is approximately zero copyright 1992 by university of chicago press

privileged traders and asset market efficiency a laboratory study the 39 experiments reported here examine the impact on trading profits and on market performance of awarding special trading privileges to some traders and not others in call market experiments the last mover and orderflow access privileges are both modestly prof itable and neither impairs market performance in continuous market experiments quicker access to orderflow information is quite profitable and more detailed access is possibly prof itable both privileges seem to enhance market performance slightly by contrast privileged marketmaking is extremely profitable and greatly impairs market performance

laboratory experimentation in economics six points of view 1 introduction and overview alvin e roth 2 bargaining phenomena and bargaining theory alvin e roth 3 equity and coalition bargaining in experimental three person games reinhard selten 4 the psychology of choice and the assumptions of economics richard thaler 5 hypothetical valuations and preference reversals in the context of asset trading marc knez and vernon l smith 6 economics according to the rats and pigeons too what have we learned and what can we hope to learn john h kagel 7 dimensions of parallelism some policy applications of experimental methods charles r plott

transition pathways for a uk low carbon electricity future abstract achieving long term targets for greenhouse gas emissions reductions such as the uk s legally binding target of reducing its emissions by 80 by 2050 will require a transition in systems for meeting and shaping energy service demands involving radical substitution to low carbon supply technologies and improvements in end use energy efficiency this paper describes the development and high level analysis of a set of transition pathways to a uk low carbon electricity system explaining key features of the core pathways developed and the distinctiveness and value of the approach the pathways use an action space concept to explore the dynamic interactions between choices made by actors which are influenced by the competing governance framings or logics that different actors pursue the paper sets out three core transition pathways market rules central co ordination and thousand flowers in which market government and civil society logics respectively dominate it summarises the key technological and institutional changes in these pathways and the roles of actors in bringing these about this leads to an identification of the key risks to the realisation of each of the pathways and of the challenges for individuals businesses social movements and policy makers in taking action to bring them about and sustain them

experiments on percolation of information in dark markets in dark markets order submissions are bilateral and transaction prices are known only to the trading counterparties here we study to what extent the information aggregation theory proposed by duffie and collaborators predicts outcomes in a laboratory version of such markets we find that prices aggregate the available information but not in the strict sense of the theory where prices converge exponentially fast to average private signals prices instead fluctuate within bands around this average the band widths reflect in the best case the precision of the average signal and otherwise the precision of a single private signal

the use of information system technology to develop tests on insider trading and asymmetric information issues related to insider trading remain popular research topics empirical studies using historical data are limited by two key factors 1 the inability to identify exactly who possesses inside information and 2 the inability to identify the accuracy of information possessed advances in information system technology enable us to overcome these problems in the laboratory using this technology we create a research shell to conduct experiments where we can identify the exact type and quality of information accessible by each trader our system includes the capability to monitor individual activities in accessing inside information the system can automatically impose a monetary penalty if random monitoring identifies a trader accessing inside information our experiments involve traders who receive access to inside information without initial knowledge of the quality of that information the results indicate that traders were able to outperform the market if penalties for being caught accessing such information were not included once penalties were included however no significant performance differences were observed finally in a second set of experiments involving a simplified market with infrequent electronic monitoring and low penalty amounts inside information seemed to be rapidly and effectively disseminated to traders possessing no inside information

information aggregation in a noisy rational expectations economy abstract this paper analyzes a general equilibrium model of a competitive security market in which traders possess independent pieces of information about the return of a risky asset each trader conditions his estimate of the return both on his own private source of information and price which in equilibrium serves as a noisy aggregator of the total information observed by all traders a closed form characterization of the rational expectations equilibrium is presented a counter example to the existence of fully revealing equilibrium is developed