Tacit Coordination in a Decentralized Market Entry Game with Fixed Capacity

We focus on a class of market entry games in which a newly emergent market opportunity may be fruitfully exploited by no more than a commonly known, exogenously determined number of firms. Our results show significant effects of the parameters manipulated in the study, namely, the market capacity, entry fee, and method of subject assignment to groups (fixed vs. random). In contrast to previous market entry games with linear payoff functions, we find no evidence of convergence to equilibrium play on the aggregate level. Shifting the focus of the analysis from the aggregate to the individual level, four clusters of subjects are identified. The patterns are: (1) choice of the same action that is independent of the parameters of the game or the outcome of previous presentations of the same game; (2) random choices with probabilities prescribed by the equilibrium solution for risk-neutral players; (3) random choices with probabilities equal to the individual observed overall proportion of entry; and (4) sequential dependencies that violate any model that assumes randomization. Subjects in the fourth and largest category are shown to adjust their choices in accordance with a simple principle of strategic reasoning.     

Money Market Uncertainty and Retail Interest Rate Fluctuations: A Cross-Country Comparison

Abstract. This paper analyzes empirically the relationship between money market uncertainty and unexpected deviations in retail interest rates in a sample of ten OECD countries. We find that, with the exception of the United States, money market uncertainty has only a modest impact on the conditional volatility of retail interest rates. Even for the United States, we find that the effects of money market uncertainty are spread out over time. Our results also indicate that money market uncertainty tends to be passed on to retail rates to a lesser extent in countries where banking relationships play a substantial role.     

“柠檬”市场：质量的不确定性和市场机制

一、引言 本文论述的是质量和不确定性问题.多种档次的物品给市场理论提出了有趣而又重要的问题.一方面,质量差异和不确定性的相互作用可以解释某些重要的劳动市场制度.另一方面,本文力求对如下主张,即"在不发达国家做生意是困难的"给出一个模型,尤其是要给出一个用于确定不诚实的经济成本的模型.理论的应用还包括对货币市场结构、不可保险性、耐用品的流动性以及品牌产品的评论.     

The Causal Relationship between Economic Policy Uncertainty and Stock Market: A Panel Data Analysis

This study applies recently developed bootstrap panel Granger causality, proposed by Kónya, to investigate a causal link between economic policy uncertainty and stock markets in nine countries over monthly periods from 2003M01 to 2014M12 (Kónya (2006 Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling, 23, 978–992. doi: 10.1016/j.econmod.2006.04.008[Crossref], [Web of Science ®] , [Google Scholar]) Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling, 23, 978–992). The modeling allows us to examine both the cross-sectional dependency and the country-specific heterogeneity. The empirical results indicate that not all countries are alike, and that the theoretical prediction that stock markets fall at the announcement of a policy change is not always supported. Specifically, this work finds evidence of the stock market leading hypothesis for India, Italy, and Spain, while the economic policy uncertainty leading hypothesis cannot be rejected for the United Kingdom. In addition, the neutrality hypothesis was supported in the remaining countries (Canada, China, France, Germany and the United States), while the feedback hypothesis, however, is not found. The findings of this study could provide important policy implications for these nine countries.     

市场不确定性与股票流动性——基于共性和微观结构的视角

市场不确定性与股票流动性有何联系?该联系受哪些因素影响?本文充分考虑内幕交易者的特征,为两者构建了理论模型,并结合沪深A股的数据证实:(1)市场不确定性越大,持股的风险越高,这降低了投资者的交易意愿,对流动性造成负面影响;(2)大宗交易制度将常规交易与大宗交易分离,减小了市场不确定性对个股的冲击,使"不确定性—流动性"关系减弱;(3)融资融券为资金或头寸短缺者提供了交易的可能,因此个股受不确定因素的影响更大,"不确定性—流动性"关系更强。文章为"当局积极干预证券市场、维持市场稳定"提供了政策依据。     

Values of Gains and Losses: Reference States and Choice of Measure

The available empirical evidence continues to suggest that people commonly value losses more, and often much more, than otherwise commensurate gains. Consequently, current practice of using the WTP measure for all changes is often likely to lead to misleading assessments of welfare changes. The reference dependence of preferences implies instead that while the WTP measure is appropriate for gains, the value of both positive and negative changes in the domain of losses will usually be more accurately assessed with the WTA measure.     

Impact of Climate Change and International Prices Uncertainty on the Sudanese Sorghum Market: A Stochastic Approach

This paper simulates the possible sorghum price change and the related probability of occurrence under different rainfall scenarios and in a context of price uncertainty in international markets. The empirical investigation is based on the stochastic approach. Results indicate an expected increase in sorghum price due to a high level of uncertainty in precipitation and in international market price, the most change likely produced by the latter, and the need to alter the agricultural view of policy making to include a market perspective.     

Labour Market Inefficiency and Frictional Unemployment in Australia and its States: A Stochastic Frontier Approach

This paper provides estimates of labour market inefficiency and the frictional unemployment rate for Australia and its States over the period January 1978 to December 1997. These estimates are derived from parametric statistical models of employment growth in which technical inefficiencies are accounted for. The mean estimate of the (technically efficient) frictional unemployment rate for Australia over the sample period is S3 per cent of the labour force. Technical inefficiency in the labour market matching process is significant and contributes around 13 per cent to the mean steady-state (naturaľ) unemployment rate. Investigation of the factors explaining the levels of inefficiency suggests that inefficiencies vary countercyclical, are related to which political party is in power and the time of year and that only Western Australia and Queensland have exhibited a significant decline in inefficiency over the period.     

Decentralized evolutionary mechanisms for intertemporal economies: A possibility result

We consider a stationary, infinite horizon aggregative model with one consumer and one producer living in each period. A decentralized intertemporal mechanism, satisfying the following evolutionary property, is constructed: if the current period's producer and consumer verify their equilibrium conditions, then the allocation is actually executed, without further verification by future agents. The mechanism is based on the idea of continual planning revision. It is shown that the outcome is an intertemporally efficient allocation which maximizes the long run average of one period utilities from consumption.We would like to thank L. Hurwicz, E. Malinvaud, and R. Radner for valuable discussions, and two referees for helpful comments. Research on this project was partially supported by a National Science Foundation Grant.     

Deciding Between the Common and Private Values Paradigm: An Application to Experimental Data*

In the application of auction theory to the real world, practitioners must choose ex ante which of the common value or the private values paradigm applies. Since intuition may fail, some authors have proposed to decide statistically between the two models. These studies, however, did not confirm whether the tests validated the true model since field data were used. I propose to use experimental data as well as Monte‐Carlo simulations to study different nonstructural rules to decide between the two paradigms. I find that regressions are inconclusive whereas a nonparametric procedure seems to be powerful and robust.     

Emission Discharge Permit Trading and Persistant Air Pollutants (A Common Pool Market Application with Health Risk Specifications)

International Advances in Economic Research - This paper shows the development of a common pool permit market formulated as a dynamic gross pool market for trading emission discharge permits. The...     

Institutions and Values: A Methodological Inquiry

Economics entails a study of institutions regardless of the school of thought, and it is inherently an analysis of institutional transformation with a vision toward creating positive social change through economic arrangements. However, the conceptions of institutions, identity of individuals, human nature as it pertains to economics, identification of the economic sphere, its concerns, and studying its evolution, all vary substantively across schools of thought. We examine the following issues: (i) the differences in the ontological identity of the individual between heterodox approaches, new institutional economics (NIE), and the neoclassical school; (ii) the central point of divergence between original institutional economics (OIE) and NIE, despite both schools being committed to the project of an “institutionally” centered approach to economics; and (iii) the absence of a cohesive project to explore foundational theoretical congruencies among those heterodox approaches that have a shared vision, values, and a common ontological identity of socially embedded people.     

A Modest Proposal for a Two‐Sided Market Clearing Institution under Asymmetric Supply Constraints with Skewed Pricing: The Market for Adoption and Abortion in the United States

This paper presents a theoretical model matching the potential supply of terminated pregnancies with the total demand for children within certain modeling constraints. First, the demand and supply of pregnancies should be studied within the theoretical framework of a market with economic incentives. Second, a theoretical model for the demand for abortion must incorporate the total market for children, which implies the market for pregnancy, abortion, and adoption. Third, there exist in the overall market for procreative goods and services certain unique characteristics that need to be carefully considered. Producers and suppliers within the procreative goods and services market have radically different price and cost elasticity functions and unique production asymmetries that create a potential net benefit for buyer and seller alike. The market for abortion and adoption, while seemingly related and similar, suffer from a fundamental disconnect, preventing a simple exchange of goods and services: abortion implies potential supply that does not flow to potential consumersthose seeking to adopt. Studying this market inefficiency will benefit from a two‐sided market analysis used in situations where an intermediary business must attract both producers and suppliers. There are two key findings. First, I find that the producer decision to supply the good depends primarily on exogenous preference formation and not on consumer‐provided incentives. Second, I find that the market would benefit from legal framework for a market clearing institution using the market for real estate as the blueprint.     

Subjective Uncertainty over Behavior Strategies: A Correction

In order to model the subjective uncertainty of a player over the behavior strategies of an opponent, one must consider the player's beliefs about the opponent's play at information sets that the player thinks have probability zero. This corregendum uses “trembles” to provide a definition of the convex hull of a set of behavior strategies. This corrects a definition we gave in [E. Dekel, D. Fudenberg, and D. K. Levine, 1999, J. Econ. Theory89, 165-185], which led to two of the solution concepts we defined there not having the properties we intended. Journal of Economic Literature Classification Numbers: C72, D82, C610.     

Financialization and Manufacturing Firm Profitability under Uncertainty and Macroeconomic Volatility: Evidence from an Emerging Market

Using semi-annual data from 1993 to 2003 for all publicly traded manufacturing firms in Turkey, this paper explores the impacts of macroeconomic uncertainty and external shocks on profitability of real sector firms in the presence of multiple investment options in both real and financial sectors. The paper argues that increasing availability and accessibility of investment opportunities in the financial markets help real sector firms sustain profit margins despite market rigidities, increasing goods market competition, or higher levels of risks. The empirical results based on dynamic panel estimations show that increasing macroeconomic uncertainty and volatility have a significantly negative effect on firm profitability. In contrast, increasing the share of financial investments in total assets is found to be reducing such negative effects at a statistically and economically significant level.     

Waste Sites and Property Values: A Meta-Analysis

Recent studies suggest that some of the most contaminated waste sites in the United States have idiosyncratic or no discernable effects on nearby property values. This paper presents a meta-analysis of the literature measuring the economic impact of sites harboring waste materials on real estate values. A sample of 46 North American studies issued from 1971 to 2008 yields 129 distinct estimates that survive outlier diagnostics. The estimation results are highly robust and significant across estimators and specifications. They suggest that all classes of waste sites affect real estate prices, but sites classified as hazardous, especially aquatic hazardous sites, are associated with the greatest discounts. The estimated impacts of nonhazardous waste and nuclear sites are not statistically different from one another. Surprisingly, estimated impacts associated with sites included on the EPA??s National Priority List (NPL) are generally smaller (although still statistically significant) than those for non-NPL hazardous waste sites. The estimates for sites in Canada and Mountain, Middle Atlantic, and South Atlantic states exceed those for other regions. Larger impact areas and aggregated data, such as census block observations, are associated with lesser estimates.     

Shiftable Externalities: A Market Solution

In this paper we propose a regulatory scheme for what has become known as shiftable externalities (Not In My Backyard type garbage location problemswhere the externality is characterized by the absence of jointness in supply).The scheme facilitates the establishment of a market for the externality, and it isfeasible for a wider class of regulation problems and more information efficientthan the other regulatory schemes that have been proposed for this type ofexternality. Finally, we show that it is possible to decentralize the participationdecision so as to take account of verification costs.