You do not have to succeed,just do not fail: When do soccer coaches get fired?

This article deals with circumstances leading to the dismissal of a soccer coach. The article is based on results from the Premier League in England over 12 consecutive years. In this paper, we converted the scores of matches (win, draw, and loss) into an index based upon how results were perceived by club owners—those empowered with the decision as to whether or not to fire the coach. The index is based on the difference between the actual and expected results reflected by betting odds. We conclude that to ensure job preservation, the manager does not have to succeed—he just must not fail.     

Convergence to perfect competition of a dynamic matching and bargaining market with two-sided incomplete information and exogenous exit rate

Consider a decentralized, dynamic market with an infinite horizon and incomplete information in which buyers and sellers' values for the traded good are private and independently drawn. Time is discrete, each period has length δ, and each unit of time a large number of new buyers and sellers enter the market. Within a period each buyer is matched with a seller and each seller is matched with zero, one, or more buyers. Every seller runs a first price auction with a reservation price and, if trade occurs, the seller and winning buyer exit with their realized utility. Traders who fail to trade either continue in the market to be rematched or exit at an exogenous rate. We show that in all steady state, perfect Bayesian equilibria, as δ approaches zero, equilibrium prices converge to the Walrasian price and realized allocations converge to the competitive allocation.     

A general class of additively decomposable inequality measures

Summary. This paper presents and characterizes a two-parameter class of inequality measures that contains the generalized entropy measures, the variance of logarithms, the path independent measures of Foster and Shneyerov (1999) and several new classes of measures. The key axiom is a generalized form of additive decomposability which defines the within-group and between-group inequality terms using a generalized mean in place of the arithmetic mean. Our characterization result is proved without invoking any regularity assumption (such as continuity) on the functional form of the inequality measure; instead, it relies on a minimal form of the transfer principle – or consistency with the Lorenz criterion – over two-person distributions. Received: October 27, 1997; revised: March 25, 1998     

What model for entry in first-price auctions? A nonparametric approach

We develop a selective entry model for first-price auctions that nests two polar models often estimated in the empirical literature on auctions, Levin and Smith (1994), and Samuelson (1985). The selective entry model features a pro-competitive selection effect. The selection effect is shown to be nonparametrically identifiable, and a nonparametric test for its presence is proposed. This test can be used to discriminate between the two polar models.     

Are there common values in first-price auctions? A tail-index nonparametric test

We develop a consistent nonparametric test of common values in first-price auctions and apply it to British Columbia Timber Sales data. The test is based on the behavior of the CDF of bids near the reserve price. We show that the curvature of the CDF is drastically different under private values (PV) and common values (CV). We then show that the problem of discriminating between PV and CV is equivalent to estimating the lower tail index of the bid distribution. Our approach admits unobserved auction heterogeneity of an arbitrary form. We develop a Hill (1975)-type tail index estimator and find the presence of common values in BC Timber Sales.     

An empirical study of auction revenue rankings: the case of municipal bonds

Using a novel dataset of 386 first‐price municipal bond auctions held in California, I perform counterfactual revenue comparisons, based on the theoretical result of Milgrom and Weber (1982). I show that the revenue in the second‐price auction is nonparametrically identified, and the counterfactual revenue in the English auction can be bounded in an informative way. These results form a basis for nonparametric estimation of counterfactual revenue differences. I find that the revenue gain from using the English auction would be in the range of 11%—19% of the gross underwriting spread, and that most of it would already be captured by using the second‐price auction. The recent explosive growth of Internet English auctions, administered by Grant Street Group, provides external support to the claim that auction design matters in this market.     

Does Greater Firm‐Specific Return Variation Mean More or Less Informed Stock Pricing?

Roll [1988] observes low R² statistics for common asset pricing models due to vigorous firm‐specific return variation not associated with public information. He concludes that this implies “either private information or else occasional frenzy unrelated to concrete information”[p. 56]. We show that firms and industries with lower market model R² statistics exhibit higher association between current returns and future earnings, indicating more information about future earnings in current stock returns. This supports Roll's first interpretation: higher firm‐specific return variation as a fraction of total variation signals more information‐laden stock prices and, therefore, more efficient stock markets.     

An optimistic search equilibrium

We study a market search equilibrium with aggregate uncertainty, private information and heterogeneous beliefs that are initially optimistic. Despite these biased beliefs, it is shown that all optimistic equilibria converge to perfect competition in the limit as the time between matches tends to 0.     

An optimal slow Dutch auction

We study slow Dutch auctions, where the clock does not fall instantaneously, but instead falls over time. Buyers are assumed less patient than the seller. In a symmetric setting, we investigate the properties of the optimal revenue-maximizing clock. We find that the clock is genuinely dynamic and the auction involves delays.     

A Walrasian Rubinstein and Wolinsky model

We provide a full dynamic analysis of a continuous-time variant of Rubinstein and Wolinsky (1985) matching and bargaining model with unbalanced flows of buyers and sellers. The focus is on the price limit as the frictions of search are removed. It is found that a necessary and sufficient condition for the limit price to be Walrasian at all times is the alignment of the initial buyer and seller stocks with the flows.