A MARKET WITH FRICTIONS IN THE MATCHING PROCESS: AN EXPERIMENTAL STUDY*

We construct a laboratory market in which there is a friction in the matching between buyers and sellers. Sellers simultaneously post prices and then buyers simultaneously choose a seller. If more than one buyer chooses the same seller, the seller's single unit is randomly sold to one of them. Our results show a broad consistency with theoretical predictions, although price dispersion exists and is slow to decay. Prices also exceed the equilibrium level when there are only two sellers, and buyers' purchase probabilities are insufficiently responsive to price differences when there are two sellers.     

Good News and Bad News: Search from Unknown Wage Offer Distributions

The largest market in national economies is the labor market. Labor market contracting is characterized by job search, often from unknown wage offer distributions. This paper reports experimental tests of finite horizon models of job search in which the wage offer distribution is unknown. Theoretically-optimal search from an unknown wage offer distribution can have the seemingly paradoxical property that some offers will be accepted that are lower than other offers that will be rejected in the same period of the search horizon. Thus the reservation wage property (or lowest acceptable wage path) may not exist. This can occur because an offer that is a priori relatively high (good news) can imply that it is highly probable that search is from a favorable distribution, and such an offer can look unattractive when it is an a posteriori relatively low offer from a favorable distribution (bad news). This paper reports results from experimental treatments for search from unknown distributions in which the reservation wage property does exist and treatments in which it does not exist. We find that the consistency of search behavior with search theory reported in earlier papers is robust to the presence or absence of the reservation wage property and to whether the draws come from known or unknown distributions.     

Henry George and Europe

A bstract . In the eyes of European scholars, publicists and politicians who studied Henry George's work, he, as a social philosopher , had adopted the position of the natural law philosophers of the 18th century. The latter inspired the Declaration of Independence, the U.S. Constitution and its Bill of Rights, as well as the poiitical philosophy of Jeffersonian democracy , the ethos of the 18th and 19th century pioneer settlers. George rejected Social Darwinism. He saw natural law as the only true and reliable basis for a just social order. Like Karl Marx he mastered Ricardian economics ; unlike Marx, George made two factors the basis of his system, labor and land. George saw that each person had a natural right —and a natural imperative for survival —to apply his or her productive capacity to the earth –as living space and as storehouse of nutrients and raw materials. The person-land relationship , he discovered, lay at the basis of human culture. And so the land's rent , now monopolized by the few, had to be appropriated to meet the needs of society, most efficiently and justly by a land value tax.     

Henry George and Europe: As Dissident Economist and Path-breaking Philosopher, He was a Catalyst for British Social Reform

Abstract . Henry George's influence was greater in the United Kingdom than in the United States. The 80s and 90s there were particularly favorable for the reception of his revolutionary ideas. Though, thanks to such thinkers as Alfred Russell Wallace and James and John Stuart Mill, a land reform movement already existed, its sudden rise to national significance was due to George. George's writing and speaking skills and his dedication moved many serious citizens into the political Left and heavily influenced men and women who became leaders of British non-Marxian socialism, at the formation and consolidation of their movement. While George's followers broke with both the Wallace and socialist movements, George's rhetorical talents awakened the broad circles of thinking people to a consciousness of the full range of the social question.     

Alternative sources of technology: An analysis of induced innovations

This paper considers why firms differ in the degree to which they rely on their internal R&D organization for generating new technologies (induced innovations) rather than on existing external technology markets (purchased innovations). An empirical model is suggested to explan inter-firm differences in the percentage of new technology induced through R&D efforts. The analysis suggests that such differences are systematically related to the firm's size, its competative environment, and its degree of diversification.     

Expected inflation and the optimal number of nominal wage rate revisions

A neglected aspect of wage contracts, namely the number of times that the nominal wage rate will be revised during the course of a non-indexed contract, is considered. Theory and evidence suggest that the optimal number of revisions depends on the cost of each revision, expected inflation and contract length.     

Random coefficient regression and the long-run phillips curve for the U.S.

This research suggests that a random coefficient regression model is well-suited for analyzing long-run versus short-run movements in wages and unemployment and is an improvement over some empirical techniques typically used.