Product classifications,consumer characteristics,and patronage preference for online auction

An important unanswered question in the area of Internet auctions is what dynamics influences consumer preferences for shopping on these online auctions. Two key aspects of studying what sells on the Internet auctions are (a) the characteristics of products to be purchased and (b) consumer characteristics. This research focuses on the relationship between product purchase preference, prior experience, and socioeconomic characteristics for the online auction participants. It uses product classification theory rooted in information economics and marketing. The study results are based on a US national sample of online auction participants. The findings suggest that product class affects online auction patronage, yet socioeconomic characteristics may not be as influential as once perceived. The online merchants can benefit from the inquiry to improve auctions for search, experience, and credence goods. The five key contributions of the findings add value to the theory and practice of consumer behavior.     

Games within borders: are geographically differentiated taxes optimal?

The discontinuous tax treatment of sales at borders creates incentives for individuals to cross-border shop. This paper addresses whether it is optimal for a state composed of multiple regions to levy differentiated commodity tax rates across the regions. In a model where states maximize social welfare, a state’s optimal commodity tax system is almost always geographically differentiated. The optimal pattern of geographic differentiation critically depends on fundamental parameters as well as whether the state has a preference for high or low taxes. Under the assumption that utility is linear in consumption and that the elasticity of cross-border shopping is less than unity in absolute value, high-tax states will find it optimal to set a tax rate that is lower in the border region than in the periphery region and low-tax states will find it optimal to set a tax rate that is higher in the border region than in the periphery region. Optimizing high-tax states will set a higher tax rate in the border region if the social welfare measure is sufficiently redistributive. With welfare maximization, it is possible for taxes to be higher in the region near the state border—an outcome that cannot arise when the government cares only about total tax revenue.     

Accounting Scandals in IPO Firms: Do Underwriters and VCs Help?

We examine whether underwriter reputation, venture capitalist (VC) backing, and VC reputation are related to the probability that a newly public firm has serious accounting problems. Using a novel data set, we find that the probability of restatement by an initial public offering (IPO) firm is positively related to underwriter reputation and negatively related to VC backing, VC reputation, and VC maturity. Our results do not appear to be driven by the endogeneity of underwriter reputation or VC backing. Our findings suggest that while VCs positively influence the financial reporting quality of IPO firms, underwriters’ concerns about revenue generation outweigh their concerns about reputation.     

Perfect competition in an oligopoly (including bilateral monopoly)

We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular, Nash equilibria are Walrasian even in a bilateral monopoly.     

Representing Heterogeneity in Consumer Response Models 1996 Choice Conference Participants

We define sources of heterogeneity in consumer utility functions relatedto individual differences in response tendencies, drivers of utility, formof the consumer utility function, perceptions of attributes, statedependencies, and stochasticity. A variety of alternative modelingapproaches are reviewed that accommodate subsets of these various sourcesincluding clusterwise regression, latent structure models, compounddistributions, random coefficients models, etc. We conclude by defining anumber of promising research areas in this field.     

Inside and outside fiat money, gains to trade, and IS-LM

Summary. We build a one-period general equilibrium model with money. Equilibrium exists, and fiat money has positive value, as long as the ratio of outside money to inside money is less than the gains to trade available at autarky. We show that the nominal effects of government fiscal and monetary policy can be completely described by a diagram identical in form to the IS-LM curves introduced by Hicks to describe Keynes' general theory. IS-LM analysis is thus not incompatible with full market clearing, multiple commodities, and heterogeneous households. We show that as the government deficit approaches a finite threshold, hyperinflation sets in (prices converge to infinity and real trade collapses). At the other extreme, if the government surplus is too large, the economy enters a liquidity trap in which nominal GNP sinks and monetary policy is ineffectual. Received: January 2, 2002; revised version: April 8, 2002 Correspondence to: P. Dubey     

Is gold an efficient store of value?

Summary. Gold and tobacco have both been used as commodity money. One difference between the two is that gold yields utility, on account of its beauty, without diminishing its quantity. Tobacco yields utility when it is consumed. If this were the only difference, Received: January 2, 2001; revised version: February 22, 2002 Correspondence to: J. Geanakoplos     

Do women managers keep firms out of trouble? Evidence from corporate litigation and policies

We find that firms where women have more power in the top management team, measured by female executives’ plurality and pay slice, face fewer operations-related lawsuits. This effect is robust to several treatments of endogeneity and does not appear to be driven by female executives' greater willingness to settle the cases. Evidence from a simultaneous equations approach suggests that firms where women executives have more power avoid lawsuits partly by avoiding some risky but value-increasing firm policies, such as more aggressive R&D, intensive advertising, and policies inimical to other parties.     

Taxation Reform and Income Distribution in Australia

This article contains an analysis of the effects of changes in the existing tax mix on the distribution of income in Australia. Shifts from direct to indirect taxes, similar to ‘Option C’ in the Government's Draft White Paper on tax reform, are considered. The general equilibrium effects of the policy changes are analysed using an extended version of the ORANI model of the Australian economy. The Shorrocks I₀ index is then used to identify the sources of inequality in the pre- and post-change distributions. The results are based on data from the ABS Income and Housing Survey for 1981–82.