The demand for agricultural land and strategic bidding in auctions

A unique feature of land auctions is that the same land is auctioned twice; first the land is broken into tracts and each tract is auctioned individually. Then, the tracts are reassembled and auctioned as a whole parcel. After the two auctions are completed, the seller chooses the one that generates a higher revenue. The main purpose of this paper is to provide an explanation of why such an auction design is employed to sell farmland. We also show that this feature of land auctions leads to interesting interaction among the bidding strategies of the players in each of the two auction stages.     

The economic role of foreclosures

We consider the economic consequences of changing the foreclosure rules. By incorporating renegotiation into the analysis, we show that although renegotiation decreases the number of foreclosures it can make the effects of foreclosure more significant. Even when foreclosure does not actually occur, a change in foreclosure rules changes the threat points of lender and borrower in any renegotiation, and thus changes the effective interest rate that the lender receives. In the long run, stated interest rates on loans will adjust to compensate for any change in the effective interest rate. We also examine the impact of a change in foreclosure laws on the borrower's welfare.     

The welfare effects of a subsidy to Multiple Listing Services

We show that the gain in consumer surplus resulting from subsidizing a Multiple Listing Service may exceed the cost of the subsidy. Thus a subsidy financed by taxing the consumer may be Pareto-improving. We give general conditions for this to hold.     

The Importance of the Sequence in UK Rights Issues

Abstract:  This study examines the market reaction to UK rights issues announcements and also investigates the position of these issues in the sequence in which the firms make multiple rights issues. The sample consists of 569 rights issues made by 243 industrial and financial firms over the period 1988–1998. The results suggest that the UK market responds negatively to earlier issues in the sequence made by multiple rights issuers. This negative reaction diminishes and becomes insignificant at or after the third issue. In addition, the study shows that the favourable response to later rights issues in the sequence is due to the diminishment in the level of information asymmetry around such issues.     

An integrated approach to measuring potential spatial access to health care services

In recent years there have been several attempts to develop quantitative measures of potential spatial access to health care services which, despite their limitations, offer many positive ideas that can perhaps be integrated into a logically consistent and generally acceptable index. It is in this vein that the current paper presents an integrated approach, drawing partially from past contributions, to measuring potential spatial access to health care services. The final access index is derived as the culmination of a series of individual measures, starting with an initial gravity formulation and progressing through successive stages as new elements, consistent with the definition and conceptualization of potential spatial access, are introduced. Application of the proposed index to the ambulatory medical care system of the Akron, Ohio SMSA, demonstrates the validity of the measure, and its suitability as a potential health care planning tool.     

Implementation by Iterative Dominance and Backward Induction: An Experimental Comparison

We report experimental results on the relative performance of simultaneous and sequential versions of the Abreu-Matsushima mechanism. Under the simultaneous version, subjects typically use undominated strategies, but apply only a limited number of iterations of dominance. Consequently the unique strategy surviving iterative elimination of strictly dominated strategies is rarely observed. Under the sequential version, subjects also typically use undominated strategies, but apply only a limited number of steps of backward induction. Thus the backward induction outcome is also rarely observed. The sequential version results in fewer observed outcomes corresponding to the predicted outcome than the simultaneous version. Journal of Economic Literature Classification Number(s): C72, C92.     

An experimental comparison of two search models

Summary. We report an experiment designed to investigate markets with consumer search costs. In markets where buyers are matched with one seller at a time, sellers are predicted to sell at prices equal to buyers' valuations. However, we find sellers post prices that offer a more equal division of the surplus, and these prices tend to be accepted, while prices closer to the equilibrium prediction are rejected. At the other extreme, sellers are predicted to sell at a price equal to marginal cost when buyers are matched with two sellers at a time. Here, we find prices are closer to, but still significantly different from, the equilibrium prediction. Thus, our results support theoretical comparative static, but not point, predictions.     

The Impact of a Multiple Listing Service

This article offers a theoretical investigation of the impact of a multiple listing service (MLS) and its optimal size. We study a principal‐agent model of real estate brokerage with multiple agents, where the entry of new agents imposes externalities on the other agents. We solve simultaneously for the equilibrium and socially efficient levels of agents’ effort choices, the size of the MLS and the commission rate. Introducing an MLS reduces the number of agents, increases agents’ effort levels and improves total surplus. Current commission rates of 5–7% appear much higher than the competitive commission rate, leading to too many agents, too much effort by agents and a lower overall surplus. We also find that giving a greater portion of the commission to the selling agent increases effort levels, reduces the number of agents and improves total surplus.     

The Power of Social Network Construction and Analysis for Knowledge Discovery in the Medical Referral Process

The social network model is powerful enough to provide for the analysis and study of a variety of application domains from daily life, including health care and health informatics. After the widespread appearance of automated tools capable of deriving and analyzing social networks, social network analysis (SNA) and mining in the health care domain has recently received considerable attention for its key role in understanding how various bodies within the health care system form communities and how they are socially connected with each other. This understanding helps enhance the organizational structures and process flows, among others. In this article, we show how SNA techniques can solve issues in the medical referral system in the Canadian health care system and the like, by analyzing the social network of general practitioners (GPs) and specialists (SPs). One of the main targets is to optimize the communication between GPs and SPs with hopes of decreasing the waiting time of patients to be seen by SPs. Various SNA and mining techniques are described and analyzed, backed by reporting some experimental results.     

The Wealth and Risk Effects of the Gramm‐Leach‐Bliley Act (GLBA) on the US Banking Industry

Abstract:   The Gramm‐Leach‐Bliley Act (GLBA) of 1999 marks the end of Depression era regulations like the Glass‐Steagall Act of 1933 and Bank Holding Company Act of 1956. These acts have restricted banks from securities and insurance underwriting business. This paper examines the impact of the GLBA on the banking industry. We find that the banking industry has a welfare gain from this law. We investigate two different categorizations of the banking industry. We find that Money Center banks followed by the Super Regional banks benefited most from this deregulation. On the other hand, banks that had Section 20 investment subsidiaries gained more than other banks in the second category. The results also show that the exposure to systematic risk for different categories of banks decreased after the passage of this law, which implies that the GLBA is fairly successful in containing the risk that accompanied the act and also created diversification opportunities. For Money Center banks, Super Regional Banks, banks with a section 20 subsidiary and banks with a new financial subsidiary, a shift in the exposure to systematic risk can explain the overall cross sectional variation in return from the deregulation. In both categorizations we find that larger banks gained more, while the overall explanatory power of profitability is not conclusive.