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.     

Navigating the spaces of Kantian reason: Notes on cosmopolitical governance within the cross‐border Euregios of the European Union

Drawing on a burgeoning academic literature devoted to issues of institutionalised cross‐border regionalism within the European Union, the author attempts theoretically to contextualise observed cross‐border dynamics as a problematic of ‘cosmopolitical governance’, defined by an ongoing deficit of socio‐political rights and duties constitutive of forms of citizenship applicable to the uniquely transnational environments of cross‐border milieux. By exploring Kantian categories of aesthetic judgement and the forms of political community implicit in their manifestation of reason, the author posits a conceptual model of cosmopolitical right which adheres neither to the morally charged rationalities sustaining the liberal, modernist nation state nor the Hobbesian rationalities characterising interstate relations, but is critically informed by the ethical demands required in achieving agreement around claims rooted in affect and the passions. As elaborated in a case study of tranfrontier labourers within the transborder (and tri‐lingual) Euregion Maas‐Rhein, this Kantian sensus communis is meant to lead to the acknowledgement of a spatial and cultural politics capable of empowering cross‐border regional actors in negotiating a measure of agency vis‐a‐vis nation state communitarian logics.     

Switching from complete to incomplete information

We construct an elementary mechanism [Dutta, B., Sen, A., Vohra, R., 1995. Nash implementation through elementary mechanisms in economic environments. Review of Economic Design 1, 173–203] that Nash implements the constrained Walrasian correspondence. We extend it to incomplete and non-exclusive information economies by enlarging the message space of agents. In addition, measurability restrictions on allocations with respect to prices proper to constrained rational expectations equilibria are imposed in the outcome function. We show that by imposing such restrictions, the mechanism Bayesian implements the constrained rational expectations equilibrium correspondence. This result shows game-theoretic connections between these two market equilibrium concepts. However, these connections are obtained at the price of strong restrictions on the behavior of agents.     

TRADE DIVERSIFICATION,INCOME, AND GROWTH: WHAT DO WE KNOW?

This paper surveys the empirical literature on export and import diversification and its linkages with growth. We review widely used measures of diversification and the evidence about their evolution focusing on how export diversification relates to trade liberalization and economic development. We also discuss the linkages between trade diversification and productivity at the firm and industry level, highlighting new advances on the linkages between import diversification and productivity.