optimal nonparametric estimation of first price auctions this paper proposes a general approach and a computationally convenient estimation procedure for the structural analysis of auctioni data considering first price sealed bid auction models within the independent private value paradigm we show that the underlying distribution of bidders private values is identified from observed bids and the number of actual bidders without any parametric assumptions using the theoiy of minimax we establish the best rate of uniform convergence at which the latent density of private values can be estimated nonparametrically from available data we then propose a two step kernel based estimator that converges at the optimal rate

market power of local cable television franchises evidence from the effects of deregulation the 1989 cable act eliminated most price regulation of cable television operators including the right of municipalities to enforce price terms in franchise agreements deregulation was justified at least partially by the contention that competition from other entertainment media eliminated any market power of cable franchises we examine the value at sale of existing cable systems before and after deregulation assuming that this value represents the expected present value of future profits deregulation had the predicted negligible effect on profits in cities with significant broadcast competition however profits appear to have increased in areas where the competition from broadcast television was less severe we explore several explanations for this increase and conclude that significant market power is the most plausible explanation

labor market regulation and the winner s curse i introduction in march 1992 the government of british columbia b c canada introduced the skill development and fair wage policy sdfwp which mandated the payment of fair wages on provincial public construction projects and promulgated the wage scales for construction crafts in 1994 sdfwp was enacted as legislation similar laws have been enacted in england and the united states in the past and as allen s 1983 survey shows their impact is a subject of controversy opponents argue that regulated wages distort the labor market reduce competition and increase construction costs proponents of the law on the other hand not only emphasize its long term positive effects on the living and working conditions of workers training and the consequent productivity increases but also claim that the alleged inflationary effect is counterbalanced by the improved labor and product quality in this paper i focus on another consequence of wage regulation namely its impact on bidding for public construction contracts i propose that the wage regulation will affect the construction market not only by changing the costs and quality of inputs but also through the transformation of the nature of the uncertainty that the contractors face during the bidding process the auction theory predicts that the optimal bid is responsive to the type of uncertainty under the so called common values cv model bidders face some common source of uncertainty regarding the construction cost and the winner is prone to underestimate the true cost rational and experienced bidders avoid this winner s curse by adding a surcharge to their estimated cost as uncertainty assumes a less collective and more private nature however the winner s curse becomes less of a problem and the rational bidder does not need to resort to the additional surcharge as a protection from underbidding the sdfwp may result in such a transformation in the bidding environment by reducing the uncertainty over labor costs that are common to all nonunion contractors elimination of the surcharge in turn may even offset the possibly higher labor cost in this paper i will test indirectly the hypothesis that the sdfwp influenced the bidding environment in b c in this fashion under the working assumption that contractors follow optimal rules in determining bids for this purpose i will use data from 54 public school construction projects tendered between 1989 and 1995 and compare the pre and post sdfwp unit bid prices the paper is organized as follows in section ii i discuss the relevant auction literature and the hypotheses i state the main hypotheses of the paper concerning the sdfwp and bidding behavior in section iii section iv describes the data an empirical model of bid price determination is presented and estimated in sections v vi and vii the final section concludes ii bidding and the winner s curse bidders for public school construction projects in b c submit sealed bids at a specified date and the lowest bidder wins the contract 1 many of the early sealed bid first price optimal bidding models presented in economics civil engineering and operations research literatures follow friedman 1956 according to these models bidders are risk neutral non colluding expected profit maximizers competing over a single project friedman suggests that the probability of being the lowest competitor is equal to the product of the probabilities of underbidding each competitor probability distributions of the competitors bids are to be obtained from the data on previous tenders this approach lays bare critical elements in competitive bidding first the contractor faces a trade off between profitability and the probability of winning the contract the bid must be high enough to yield a positive profit and low enough to win over other bids second superior cost efficiency enables the contractor to change the parameters of this trade off in his or her favor

sequential auctions price trends and risk preferences abstract we analyze sequential auctions in a general environment where bidders are heterogeneous in risk exposures and exhibit non quasilinear utilities we derive a pure strategy symmetric equilibrium for the sequential dutch and vickrey auctions respectively with an arbitrary number of identical objects for sale when bidders are risk averse preferring the equilibrium price sequences must be downward upward drifting the declining price anomaly is thus evidence of bidder risk aversion in this general environment these results derive from a key assumption that bidders marginal utilities are log supermodular in payment and type

bidding behavior at sequential first price auctions with out supply uncertainty a laboratory analysis abstract we report on a series of experiments that test the effects of an uncertain supply on bidding behavior and prices in sequential first price auctions with private independent values and unit demands supply is assumed uncertain when buyers do not know the exact number of units to be sold i e the length of the sequence we observe an important overbidding in all but the last stage of a sequence no matter whether supply is certain and a non monotone behavior when supply is certain yet the data qualitatively support most stage to stage bid predictions and the price trend predictions for risk neutral bidders

sequential auctions with informational externalities and aversion to price risk decreasing and increasing price sequences a large body of empirical research has shown that prices of identical goods sold sequentially sometimes increase and often decline across rounds this article introduces a tractable form of risk aversion called aversion to price risk and shows that declining prices arise naturally when bidders are averse to price risk when there are informational externalities there is a countervailing effect which pushes prices to raise along the path of a sequential auction even if bidder s signals are independent the article shows how to decompose the effect of aversion to price risk from the effect of informational externalities

a nonsmooth nonconvex model of optimal growth this paper analyzes the nature of economic dynamics in a one sector optimal growth model in which the technology is generally nonconvex nondifferentiable and discontinuous the model also allows for irreversible investment and unbounded growth we develop various tools to overcome the technical difficulties posed by the generality of the model we provide sufficient conditions for optimal paths to be bounded to converge to zero to be bounded away from zero and to grow unboundedly we also show that under certain conditions if the discount factor is close to 1 any optimal path from a given initial capital stock converges to a small neighborhood of the golden rule capital stock at which sustainable consumption is maximized if it is maximized at infinity then as the discount factor approaches 1 any optimal path either grows unboundedly or converges to an arbitrarily large capital stock

structural estimation of the affiliated private value auction model we consider the structural estimation of the affiliated private value apv model in first price sealed bid auctions the model allows for bidders individual efficiencies and opportunity costs while permitting dependence among bidders private values through affiliation we establish the nonparametric identification of the apv model characterize its theoretical restrictions and propose a computationally convenient and consistent two step nonparametric estimation procedure for estimating the joint private value distribution from observed bids using simulated bid data we provide a step by step guide on how to implement our procedure and show the good behavior of our estimator in small samples

an empirical analysis of entrant and incumbent bidding in road construction auctions this paper explores differences in the bidding patterns of entrants and incumbents in road construction auctions we find that entrants bid more aggressively and win auctions with significantly lower bids than incumbents the differences in their bidding patterns are consistent with a model of auctions in which the distribution of an entrant s costs exhibits greater dispersion than that of an incumbent s and relations of stochastic dominance in the distributions do not persist for the entire range of estimated costs we also find that more efficient firms bid on average more aggressively and firms with greater backlogs bid less aggressively

on conservation of renewable resources with stock dependent return and nonconcave production textabstractthis paper analyzes conservation and extinction of renewable resources when the production function is nonconcave and the return function depends on consumption and the resource stock the paper focuses on the efficiency of global conservation a safe standard of conservation and extinction which outcome obtains depends on the marginal rate of substitution between investment and the stock in addition to the discount factor and the marginal productivity of the resource conservation may be efficient even if the discounted intrinsic growth rate of the resource is less than 1 journal of economic literature classification numbers d90 q20

do auctions induce a winner s curse new evidence from the corporate takeover market abstract we contrast the winner s curse hypothesis and the competitive market hypothesis as potential explanations for the observed returns to bidders in corporate takeovers the winner s curse hypothesis posits suboptimal behavior in which winning bidders fail to adapt their strategies to the level of competition and the amount of uncertainty in the takeover environment and predicts that bidder returns are inversely related to the level of competition in a given deal and to the uncertainty in the value of the target our measure of takeover competition comes from a unique data set on the auction process that occurs prior to the announcement of a takeover in our empirical estimation we control for the endogeneity between bidder returns and the level of competition in takeover deals controlling for endogeneity we find that the returns to bidders are not significantly related to takeover competition we also find that uncertainty in the value of the target does not reduce bidder returns related analysis indicates that prestigious investment banks do not promote overbidding analysis of post takeover operating performance also fails to find any negative effects of takeover competition as a whole the results indicate that the breakeven returns to bidders in corporate takeovers stem not from the winner s curse but from the competitive market for targets that occurs predominantly prior to the public announcement of bids

bidding behavior in a repeated procurement auction a summary abstract this paper considers bidding behavior in a repeated procurement auction setting we study highway procurement data for the state of california between december 1994 and october 1998 we consider a dynamic bidding model that takes into account the presence of intertemporal constraints such as capacity constraints we estimate the model non parametrically and assess the presence of dynamic constraints in bidding

is environmental policy a secondary trade barrier an empirical analysis should international trade agreements be extended to include negotiations over environmental policy the answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries our results suggest that they do previous studies of this relationship have treated the level of environmental regulation as exogenous and found a negligible correlation between environmental regulation and trade flows in contrast we find that when the level of environmental regulation is modelled as an endogenous variable its estimated effect on trade flows is significantly higher than previously reported jel classification fl f14 f18 est ce que la politique environnementale est une barriere commerciale secondaire une analyse empirique est ce que les accords commerciaux internationaux doivent etre etendus pour couvrir la politique environnementale la reponse depend du degre de distorsion que les pays introduisent dans leur politique environnementale pour proteger leurs industries nationales nos resultats suggerent que cet impact est important des etudes anterieures de cette relation ont traite la politique environnementale comme exogene et ont montre qu il existe une co relation negligeable entre politique envir onnementale et flux commerciaux au contraire nous revelons que quand la politique environnementale est consideree comme variable endoge ne son effet sur les flux com merciaux est plus eleve de maniere significative que ce qu on a note anterieurement

optimal sequential auctions sequential sealed first price and open descending price procurement auctions are studied we examine which procurement auction rule achieves the low procurement cost we show that the answer to this policy question depends on whether the items are complements or substitutes with substitutes the first price procurement auction is preferred while with complements the open descending price procurement auction is preferred we also illustrate the procurement cost minimizing auction and the auction rule preferred by the bidders with substitutes bidders prefer the open descending price procurement auction while with complements bidders prefer the first price procurement auction

on sustained growth under uncertainty we analyze a stochastic one sector model of economic growth and investigate the conditions under which long run growth occurs almost surely in contrast to the deterministic version of the model the utility function plays a crucial role in determining the long run behavior of output the central purpose of theories of economic growth is to understand the factors behind long run growth of economies and to explain differences in growth performances of economies in terms of fundamental endowments and choices a wide class of endogenous growth models has been specified in the last decade and they have explored a large array of possible explanatory variables for the differences in observed growth rates between countries with some notable exceptions most of these models are deterministic and therefore ignore the fundamental uncertainties which affect productivity and cause diversity between growth of nations the exceptions which include real business cycle models that examine the consequence of productivity shocks in endogenous growth frameworks use specific utility and production functions drawn from the log linear family see among others king et al 1988 king and rebelo 1988 de hek 1999 jones et al 1999 a general analysis of the phenomenon of sustained growth in economies subject to technological shocks is not yet available and the kind of conditions needed to guarantee sustained stochastic growth are not well understood in this article we address this issue in the simple framework of a stochastic one sector convex growth model when the technology is globally productive in the sense that marginal productivity of investment is bounded above one output and consumption flows can grow indefinitely i e long run growth is feasible whether such growth actually occurs depends on the intertemporal preference structure 2 in the deterministic version of this model this problem was first discussed by gale and sutherland 1968 who extended the classical optimal growth analysis to the case of such a productive technology more recently jones and manuelli 1990 have rigorously characterized the possibility of sustained long run growth in a variant of the one sector deterministic growth model see also rebelo 1991 3 the main result is that long run growth

a complete characterization of optimal growth paths in an aggregated model with a non concave production function the convexity of technology has played a crucial role in economic analyses of optimal one sector growth problems for example two of the key results on the traditional model of ramsey 1928 that have relied on the convexity of the technology are that optimal intertemporal growth involves moving monotonically towards a unique steady state as in cass 1965 koopmans 1965 and that the value function is a concave differentiable function of the initial capital stock as in benveniste and scheinkman 1979

understanding cross national trends in high tech renewable power equipment exports to the united states we track us imports of advanced technology wind and solar power generation equipment from a panel of countries during 1989 2010 and examine the determining factors including country size sector specific us fdi outflow and domestic wind and solar power generation differentiating between the core high tech and the balance of system equipment we find us imports of both categories have grown at significantly higher rate from the relatively poorer countries and particularly china and india larger countries are found to be exporting significantly more and us fdi is found to play a significant positive role in the exports of high tech equipment for the poor countries for the core wind and solar high tech equipment we find domestic renewable power generation of the exporting countries also played a significant positive role

resource allocation models with risk aversion and probabilistic dependence offshore oil and gas bidding bidding for offshore u s oil and gas leases is a major corporate resource allocation problem involving enormous uncertainties and very high stakes this paper presents two new operationally useful decision analysis models to aid in bidding for oil and gas leases they are unique in that they consider risk aversion and probabilistic dependence among the values of the leases with both bid levels and partnership shares as continuous decision variables they are suitable for use in evaluating proposed bidding policies or as objective functions in optimization formulations practicality of their data requirements is evidenced by use of one of the models for several years in a major oil company comparison of optimal solutions to these models on a small example using actual oil company data demonstrates the importance of taking risk aversion and probabilistic dependence into account and provides insight into the adequacy of independence and conditional dependence as approximations for dependence these results are pertinent to other real world allocation problems that share many of the characteristics of bidding problems such as r d funds allocation

catalogue vs order of sale effects in sequential auctions theory and evidence from a rare book sale we examine bidding in a rare book sequential auction that has features of a natural experiment lots were arranged in alphabetical order the reserve set non strategically and half the bids placed by mail in bidders we distinguish between the effects induced by the print order of the catalogue from those by the sequential nature of the sale we document the existence of distinct catalogue effects on prices number of bids and price variability and determine their causes we demonstrate that these catalogue effects also influence floor bidder behaviour we derive a theoretical model that generates key aspects of floor bidder behaviour copyright 2004 royal economic society

equilibrium reserve prices in sequential ascending auctions abstract we study a model where bidders have perfectly correlated valuations for two goods sold sequentially in two ascending price auctions the seller sets a reserve price before the beginning of each auction despite the lack of commitment by the seller we characterize an equilibrium and study its properties strategic non disclosure of information takes the form of non participation in the early auction by low valuation bidders while high valuation bidders bid up to their true valuations some buyers who would profitably buy at the reserve price refrain from participating in order to decrease the second auction reserve price

how auctions work for wine and art interview auctioneers and even to buy a little wine in the meantime i have also had the opportunity with john abowd 1988 to observe and collect data on the auction sale of impressionist and contemporary paintings this paper reports on some of the empirical regularities that i and others have observed in the actual operation of the auction markets for these items in view of the rich and diverse array of theoretical literature on auctions it seems high time economists began to spell out precisely what facts it is meant to explain 2

predicting bid prices by using machine learning methods abstractit is well known that empirical analysis suffers from multicollinearity and high dimensionality in particular this is much more severe in an empirical study of itemized bids in highway pr

footloose and pollution free in numerous studies economists have found little empirical evidence that environmental regulations affect trade flows in this paper we propose and test several common explanations for why the effect of environmental regulations on trade may be difficult to detect we demonstrate that whereas most trade occurs among industrialized economies environmental regulations have stronger effects on trade between industrialized and developing economies we find that for most industries pollution abatement costs are a small component of total costs and are unrelated to trade flows in addition we show that those industries with the largest pollution abatement costs also happen to be the least geographically mobile or footloose after accounting for these distinctions we measure a significant effect of pollution abatement costs on imports from developing countries and in pollution intensive footloose industries

competitive equilibria on turnpikes in a mckenzie economy i a neighborhood turnpike theorem in his seminal paper bewley 1982 integrates growth theory and competitive equilibrium theory considering a model with finitely many infinitely lived consumers who trade commodities in infinitely many competitive markets from the present through the future in such a model a competitive equilibrium path is an optimal growth path using this property he proves a turnpike theorem for competitive equilibrium paths in growth theory a social welfare function with respect to which optimal growth paths are considered has been assumed to be exogenously given bewley shows that in the competitive market system the market mechanism endogenously determines the social welfare function with respect to which an equilibrium path is regarded as an optimal path in bewley s model the future is discounted by a factor p in growth theory two types of turnpike theorems have been proved when the future is discounted the first type is called a neighborhood turnpike theorem it asserts that given c 0 there is 0 p 1 such that p p 1 implies that an optimal path at the discount factor p eventually stays within the s neighborhood of a stationary path this theorem does not require the social welfare function to be differentiable but only to be strictly concave and is proved by mckenzie 1979 the second type is called an asymptotic turnpike theorem it asserts that there is 0 p 1 such that p p 1 implies that an optimal path at the dicount factor p converges to a stationary path this theorem has been proved only under differentiability assumptions scheinkman 1976 bewley proves an asymptotic turnpike theorem making use of extensive differentiability assumptions the purpose of this paper is to synthesize these two importnat results of bewley and mckenzie namely we will prove a neighborhood turnpike theorem of mckenzie type in a model like that of bewley making no differentiability assumptions we will make a few generalizations of bewley s assumptions among them of importance are relaxing his differentiability assumptions weakening his interiority assumption and replacing his assumption of decreasing returns to

synergies in recurring procurement auctions an empirical investigation this article examines the impact of synergies on bidder behavior in recurring road construction procurement auctions the study reveals that projects are spatially correlated when bidders with potential synergies participate the results indicate that their probability of bidding and winning increases and they bid more aggressively finally the study shows that a firm that is capacity unconstrained will bid more aggressively than one that is capacity constrained

scale economies and the dynamics of recurring auctions we analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects either economies or diseconomies of scale we show that economies of scale give rise to declining expected equilibrium prices whereas the converse is not generally true moreover first and second price auctions are not always revenue equivalent economies of scale make second price auctions more profitable for the seller whereas revenue equivalence may be preserved in the case of diseconomies

one sector nonclassical optimal growth optimaility conditions and comparative dynamics the authors consider a one sector nonclassical model of optimal economic growth characterized by a convex concave production function they provide in a dynamic programming context a characterization of all local interior maximum of the miximand of the bellman equation these conditions are the euler equation and a second order condition namely that the marginal propensity to consume is less than one an example is used to illustrate these conditions also several comparative dynamic results are derived in particular it is shown that the maximum and minimum selections out of the optimal consumption correspondence shift down as the discount factor increases copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

can branding and price of pharmaceuticals guide informed choices towards improved pollution control during manufacturing abstract pharmaceutical manufacturing can lead to substantial discharges of active pharmaceutical ingredients into the environment with local consequences to the environment and in the case of antibiotics potentially global implications in terms of increasing risks for resistance development in this study we used swedish sales data for pharmaceuticals combined with data on the origin of the active ingredients to determine if price pressure and generic substitution are related to the estimated general environmental performance and the perceived corruption levels of the production countries in line with the general perception india was the largest producer of generics while europe and the usa dominated for branded products we found that the price and environmental performance index of the production countries were linked but that this relationship was largely explained by whether the product was original or generic although this relationship would allow buyers to select products that are more likely to originate from countries that in general terms have better pollution control it lacks resolution we conclude that to better allow consumers hospitals and pharmacies to influence the environmental impact of their product choices there is need for regulation as well as transparency in the production chain to this end emissions from manufacturing need to be measured allowing for control and follow up on industry commitments towards sustainable manufacturing of pharmaceuticals

an empirical examination of the pollution haven hypothesis for india towards a green leontief paradox using input output analysis we examine whether india can be regarded as a pollution haven we calculate the extra co2 so2 and nox emissions induced by 1 billion rupees of additional exports this is compared with the reduction of indian pollution caused by an import increase of equal size in contrast to what the pollution haven hypothesis states for developing countries we find that india considerably gains from extra trade comparing 1996 1997 with 1991 1992 the gains have only increased indicating that india has moved further away from being a pollution haven the outcome is robust to changes in the underlying assumptions

auctions and the price of art the value of most important works of art is established by public auction either directly by an actual sale or indirectly by reference to other sales how the auction system works is thus a critical determinant of how the public s preferences are translated into the evaluation of artistic work the auction system is central in the determination of the incentives for artistic work and the efficiency of the auction system is a key determinant of the cost of creating and distributing works of art this paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system actually works what it indicates about price formation and how well it performs we begin our discussion in section 2 with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics the first topic concerns how auction prices can be used to determine and compare overall price movements within the art market and other markets and the second topic concerns how the auction mechanism influences prices we

some evidence of the winner s curse the mathematical complexity of auction theory has restricted empirical work to qualitative tests of its basic predictions with mixed results this paper exploits the theory of order statistics to derive a nash bid function that is linear in its parameters allowing direct estimati on by linear least squares the bid function is fitted to a cross section of auctions for highway construction contracts from thirty three states and provides support for several hypotheses of the theory of common value auctions copyright 1988 by american economic association

dirty industries patterns of change in industrial countries this article concerns itself with the environmental role of heavily polluting industries since 1970 analysing its development in 11 basic industries as well as electricity production and road transport in 32 industrial countries it argues for a green industrial policy demonstrating that other mitigations of environmental pressure in industrial countries end of pipe treatment relocation to the third world structural change in the industrial sector and even environmentally oriented modernization have so far been unable to solve the problems of dirty industries although some approaches have shown some promise

do farmers value the environment evidence from a conservation reserve program auction the paper uses data from one conservation reserve program crp auction to elicit farmers attitudes toward the environment by analyzing their bids the crp pays farmers to remove chosen plots of land from agricultural production and put them to a conservation use an interesting aspect of this auction is that winners are determined by a combination of low bids and environmental scores of individual plots using decision theoretic approach to model this auction we show that farmers condition their bids on the strength of their environmental scores and that they value environmental benefits especially those that increase future soil productivity of their land

endogenous growth in multisector ramsey models in this paper i give sufficient conditions for the existence of endogenously growing optimal paths in a general multisector ramsey model of optimal capital accumulation the key assumption involves the existence of a positive vector of capital stocks which admits strictly positive consumption and expansibility in inverse proportion to the utility discount factor if the technology set contains the ray through such a point in addition to standard convexity and interiority assumptions then optimal paths grow without bound from any strictly positive initial stocks the result unifies a number of existing models in the growth theory literature within both capital theory and macroeconomics there has been a resurgence of interest in models of capital accumulation which display endogenous growth models without time dependent technologies which nonetheless have the property that the optimal or equilibrium paths of capital and consumption which they generate grow without bound it is thus surprising that little work has been done in establishing conditions which guarantee this property a recent exception is jones and manuelli 1990 working in a variant of the standard one sector ramsey model of optimal growth earlier gale and sutherland 1968 also proved a growth result for an undiscounted one sector ramsey model by and large though this research program has been carried out in a series of particular examples with little suggestion of a general framework for achieving endogenous growth this essay attempts to fill that gap at least for models which may be cast in the convex ramsey optimal growth framework 2 the results below provide sufficient conditions for the existence of endogenously growing optimal paths in a convex multisector ramsey model of optimal capital accumulation thus unifying a number of particular examples in the growth literature as well as providing simple conditions for guaranteeing growth in more complex models by way of motivation consider the simplest of all endogenous growth models the one sector linear model or a k model used by rebelo 1991 there is a single all purpose consumption investment good an infinitely lived representative con

complements and substitutes in sequential auctions the case of water auctions we use data on sequential water auctions to estimate demand when units are com plements or substitutes a sequential english auction model determines the estimating structural equations when units are complements one bidder wins all units by paying a high price for the first unit thus deterring others from bidding on subsequent units when units are substitutes different bidders win the units with positive probability paying prices similar in magnitude even when the same bidder wins all units we re cover individual demand consistent with this stark pattern of outcomes and confirm it is not collusive but consistent with non cooperative behavior demand estimates are biased if one ignores these features

sequential auctions of interdependent objects israeli cable television licenses in israel area cable television catv licenses were auctioned sequentially this paper provides evidence that i there were interdependencies among many of the franchises and that ii subscriber fees for the interdependent franchises decreased over time in this auction

is india specialising in polluting industries evidence from us india bilateral trade recently the apex environmental agency of india observed that domestic industrial pollution has been increasing at an alarming rate over the last two decades and the need to rein in traditional polluting industries this raises the pertinent question of whether the poor domestic pollution regime has affected the pattern of india s trade in dirty manufactured products in the post liberalisation era since 1991 we find that on the whole india has remained a net importer of pollution intensive manufactured goods however there is a distinct trend of increasing specialisation in specific dirty industries especially in the bilateral trade with high income countries and to a lesser degree with low income countries the usa being india s single largest country trading partner in the post liberalisation era we test for pollution offshoring at the finer industry level in us india bilateral trade while we find that the pollution haven effect is not significant india s specialisation in certain dirty manufacturing industries through the last decade remains a disturbing trend india needs to integrate environmental sustainability within industrial growth urgently and it is pertinent to implement policies which would reflect the true pollution costs in an industry that is increasingly competing in the international market

international trade and environmental regulation time series evidence and cross section test this paper examines empiricallywhether more stringent domestic environmental policiesreduce the international competitiveness ofenvironmentally sensitive goods esgs our timeseries evidence indicates that there are no systematicchanges in trade patterns of esgs in the last threedecades despite the introduction of more stringentenvironmental regulations in most of the developedcountries in the 1970s and 1980s this observedphenomenon is then subjected to a multi countryeconometric test using an extended gravity equationframework the test suggests that overall morestringent environmental regulations do not reducetotal exports exports of esgs and exports ofnon resource based esgs neither was there anyevidence to support the hypothesis that new tradebarriers emerge to offset the effects of morestringent environmental regulations

sustained endogenous growth with decreasing returns and heterogeneous capital abstract the possibility of sustained long run growth is typically associated with the presence of some endogenous engine of growth it may allow the economy to grow without bound despite the use of some non reproducible resources such situations can lead to dynamic models combining the features of sustainable growth and decreasing returns one sector models of this kind have recently attracted much attention in macroeconomics applications their approximate linearity for the purposes of long run analysis has been noted this paper is aimed at establishing the general fact dynamic models one or multi sector which are characterized by sustained endogenous growth with non increasing returns display the patterns of optimal growth asymptotically equivalent to those generated by models with linear technology i consider a neoclassical growth model with heterogeneous capital develop its linear counterpart and prove their asymptotic equivalence in terms of long run optimal growth rates and cross sectoral profiles of consumption real interest rates and relative prices this result also implies the non substitution theorem for the neoclassical dynamic model of sustained growth optimal input profiles relative prices and interest rates are asymptotically independent of intertemporal preferences

turnpike theorems in nonconvex nonstationary environments this paper provides a comprehensive development of turnpike theory in a stochastic aggregative model with time varying nonconvex technology a new approach to turnpike theorems is developed that exploits the monotonicity of optimal programs and utilizes a supermartingale process generated by stochastic euler equations this extends the classical turnpike theory to general nonconvex nonstationary environments copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

increasing competition and the winner s curse evidence from procurement we assess empirically the effects of the winner s curse which in common value auctions counsels more conservative bidding as the number of competitors increases first we construct an econometric model of an auction in which bidders preferences have both common and private value components and propose a new monotone quantile approach which facilitates estimation of this model second we estimate the model using bids from procurement auctions held by the state of new jersey for a large subset of these auctions we find that median procurement costs rise as competition intensifies in this setting then asymmetric information overturns the common economic wisdom that more competition is always desirable

asymmetric information and collusive behavior in auction markets we present a theoretical and empirical analysis of the behavior of a bidder s cartel in a multiperiod auction market in which the purchaser is relatively uninformed our work establishes a tentative connection between the economics of information and collusion by concentrating on the cartel s informational monopoly and its ability to both increase profits and mask its presence by passing misinformation to the purchaser in the models we develop costs are assumed to be stochastic and projects awarded in adjacent periods to be substitutes for one another as a result the purchaser will have incentive to intertemporally reallocate his demand buying more or less of the current period s project depending upon whether the current market price is lower or higher than the price which he expects to prevail in the future a purchaser who needs to form such price expectations yet is ignorant about production costs and market structure will be particularly attracted to the auction mechanism because the data contained in past auctions bids can apparently be incorporated into an explicit structural model of expected future price in fact such a purchaser may hold auctions frequently merely to acquire information such pleasant appearances are deceiving once the auction s bidders become aware of the informational use to which their bids are being put they will have incentive to form a cartel thereby extracting a premium for their knowledge by misinforming the purchaser and skewing his intertemporal decision making to their advantage in some respects the mechanics of our model resemble the case of a multiproduct monopolist selling goods that are substitutes for one another what is unique to our analysis is the dependence of one of the goods future demand on price expectations which are an information resource we are suggesting that information that is distributed asymmetrically among market participants is susceptible to the inefficiencies of collusion in some ways the implications of our work are considerably stronger than this because our cartel never reveals its true knowledge and thus our market may be more inefficient than more standard monopolies in which the good is always traded albeit at noncompetitive prices furthermore by explicitly modeling the purchaser s rational structural approach to price forecasting we point out that complete rational expectations models may be more susceptible to exploitation by informational cartels than simpler forecasting techniques we have tested the implications of our model in a case study of north carolina highway construction cartels the highway construction industry is an auction market characterized by government procurement agencies who are uninformed relative to suppliers and comes complete with a substantial record of known collusion in recent years thus it seems an ideal hunting ground for verification of our theoretical findings our paper proceeds as follows in section i we model a multiperiod competitive auction market and describe a bayesian mechanism through which the purchaser uses past data to improve the accuracy of his price expectations section ii establishes theoretical results for the bidders cartel which has incentive to form in this market we describe massachusetts institute of technology cambridge ma 02109 and university of arizona tucson az 85721 respectively nold was formerly of rhodes associates and is now deceased we thank richard schmalensee and the participants of the economic and legal organization workshop at the university of chicago for valuable suggestions part of this research was supported under research grant 81 ij cr0062 from the national institute of justice

an experimental study on sequential auctions with privately known capacities abstract we experimentally study sequential procurement auctions where bidders capacity constraints are private information our experiment involves two first price auctions with a belief elicitation stage at the end of the first our results show that i observed behavior in the second auction is overall consistent with sequential rationality ii first auction bids are decreasing in the capacity of the bidder but iii stated beliefs are inconsistent with the actual play hence subjects seem to be aware of the opportunity cost of early bids which leads capacity constrained bidders to bid more cautiously than unconstrained ones on the other hand since they do not recognize the informative content of bids the potential signaling cost associated with early bids does not come into play

bidding behaviour in second price auctions rare stamp sales 1923 1937 we find significant asymmetries between bid functions of the low and high mail bidders in auctions of rare stamps over the extremes of the business cycle 1923 1937 we also find a strong negative relationship between the number of bidders and the bids suggesting that the common value characteristics of stamps outweigh their private value characteristics finally we show that stamp returns are positively related to inflation and to stock yields and negatively to interest rates these last results correspond to other studies of stamps over more stable sample periods

sequential auctions with synergies an example abstract an equilibrium in an example of a two unit sequential ascending price auction where some bidders have superadditive values is presented the equilibrium is in pure strategies in equilibrium the expected price declines from the first to the second auction

repeated common value auctions with asymmetric bidders abstract this paper considers a first price common value auction with one sided private information among bidders an object is rented each period to the highest bidder without revealing the bids made in previous periods the paper extends single crossing arguments used in static games to show the existence of equilibrium in this repeated auction the model predicts that bidders bid more aggressively in a repeated auction than in a static auction because a higher bid increases the amount of information learned through bidding the aggressive bidding behavior also implies that the per period revenue of the repeated auction is higher than that of the one period counterpart this bidding behavior leads to a theoretical explanation for the winner s curse in repeated auctions in addition the model yields predictions like an increasing wage schedule over time and the institution of a signing bonus that are consistent with labor market observations