The value of information in a sealed-bid auction

In this paper, we explore bidders' incentives to gather information in auctions, when there is one bidder with only public information and another with some private information. We find that the bidder with only public information makes no profit at equilibrium, while the bidder with private information generally makes positive profits. Moreover, the informed bidder's profits rise when he gathers extra information, and the increase in greater when the information is collected overtly than when it is collected covertly. When the uniformed bidder can observe some of the better-informed bidder's information, he prefers to make his observations covertly. If the seller has access to some of the better-informed bidder's information, or if he has affiliated information of his own, he can raise the expected price by adopting a policy of making that information public. However, there are cases where a policy of publicizing his information would lower the expected price. The distinguishing feature of these latter cases seems to be that the seller's information is complementary to the information of the better-informed bidder.     

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VII. Erzeugung und handle,warenmärkte

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Otto von Zwiedineck-Südenhorst † 6. 8. 1957

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Vorwort

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Evidence of the invisible: toward a credibility revolution in the empirical analysis of tax evasion and the informal economy

Empirical research about tax evasion and the informal economy has exploded in the past few decades, seeking to shed light on the magnitude and (especially policy) determinants of these phenomena. Quantitative information informs the analysis of policy choices, enables the testing of hypotheses about determinants of this phenomenon, and can help with the accurate construction of national income accounts. Even as empirical analysis has burgeoned, some have expressed doubts about the quality and usefulness of some prominent measures. The fact that high-quality data is elusive is neither surprising nor a coincidence. The defining characteristic of tax evasion and informal economic activity—that they are generally illegal—often renders unreliable standard data collection methods such as surveys. Unlike invisible phenomena in the natural sciences, these invisible social science phenomena are hard to measure because of choices made by individuals. Analysis of tax evasion and the informal economy must proceed even in the absence of the direct observability of key variables, and theory should guide the construction and interpretation of evidence of the “invisible.” In this paper, we address what can be learned using micro or macro data regarding tax evasion and the informal economy under given conditions and assumptions, and critically review some of the most common empirical methods in light of our conclusions. We conclude with an entreaty for researchers in this field to enlist in the “credibility revolution” (Angrist and Pischke in J. Econ. Perspect. 4(2):3–30, 2010) in applied econometrics.     

EZB: Mehr Transparenz wagen

The ECB is a central bank with a high level of transparency. However, it still does not publish voting records or minutes, and it publishes infl ation forecasts only on a quarterly basis. This paper argues that both the credibility and effectiveness of the ECB’s monetary policy could be enhanced by enlarging its transparency. This is especially necessary if the central bank takes such far-reaching decisions as the unlimited bond buying programme. Then the public has a right to know how and why this decision was taken.