Defensive sniping and efficiency in simultaneous hard-close proxy auctions

A well-known myopic bidding strategy fails to support an equilibrium of simultaneous ascending proxy auctions for heterogeneous items when a hard-close rule is in place. This is because, in common with the single-auction case, last minute bidding (sniping) is a best response to naive behaviour. However, a modification to the myopic strategy in which all bidders submit an additional bid in the closing stages of the auction–a practice I call ‘defensive sniping’–is shown to yield an efficient, belief-free equilibrium of such environments. This equilibrium is essentially unique within the class of belief-free, efficient equilibria.     

Modeling Distribution Services and Assessing Their Welfare Effects in a General Equilibrium Framework

Most international trade models fail to account for the fact that almost all goods must pass through the distribution sector. The authors compare different approaches to modeling distribution within an Applied General Equilibrium framework and find that such modeling may significantly affect trade opening simulations. They also predict large potential gains from streamlining distribution. For instance, a 10% reduction in Japan's final goods distribution margins would benefit it as much as worldwide free trade would. They also find that, compared to trade opening, reducing margins leads to smaller inter‐sectoral production shifts and thus may engender less political opposition.     

Behavioral mechanism design: evidence from the modified first-price auctions

This paper tests the behavioral equivalence of a class of strategically-equivalent mechanisms that also do not differ in terms of their procedures. In a private value setting, we introduce a family of mechanisms, so-called Mechanism (α), that generalizes the standard first-price sealed-bid auction. In Mechanism (α), buyers are asked to submit a value which will then be multiplied by α to calculate the bids in the auction. When α =?1, Mechanism (α) is the standard first-price sealed-bid auction. We show that for any α, calculated bids should be identical across mechanisms. We conduct a laboratory experiment to test the behavioral equivalence of this class of mechanisms under different values of α. Even though the procedure and environment do not change across auctions, we do not observe the same bidding behavior across these strategically-equivalent mechanisms. Our research can inform mechanism design literature with respect to the design of optimal mechanisms.     

Commitment to a friend,a service provider,or a service company—are they distinctions worth making?

In two studies, the authors examine three targets of commitment in service provider–consumer relationships and their effects on customer loyalty. The results indicate that service consumers distinguish between commitment to a service company, commitment to an individual in the role of service employee, and commitment to an individual outside of the role of service employee (e.g., a personal commitment such as a friendship). In addition, these three targets of commitment are hierarchically related and have differential effects on various customer responses. The results have implications for both customer relationship managers and researchers studying such relationships.

Price competition in the market for business telecommunications services

We estimate a two-step control-function model that relates incumbent prices for small-business telecommunications services to the number of facilities-based entrants, cost, demand, regulatory conditions, and a correction for endogenous market structure. Results show that the price effects from entry are understated in ordinary least squares regressions. When controlling for endogeneity, prices are negatively related to the number of entrants, indicating that markets without a competitive presence could exhibit market power. These findings should prove helpful to the Federal Communications Commission and other State regulators determining the conditions under which price and other forms of regulation may be relaxed.     

Jointness in production and farmers' willingness to supply non-marketed ecosystem services

This paper highlights how farmers' willingness to supply non-marketed ecosystem services (ES) is influenced by whether or not the non-marketed ES are produced jointly with agricultural products. When marketed products and non-marketed ES share some production inputs the production relationships between the two may be complementary, competitive or substitutive. Using a cost minimization framework, it is shown how complementary relationships lead to costless voluntary provision of non-marketed ES (typically the case for ES that are supportive of provisioning ES for marketed farm products). It is also shown how competitive production relationships lead to provision of non-marketed ES at lower cost than when non-marketed ES are direct substitutes for farm products or are produced outside of agriculture. The paper closes by showing how the minimum willingness to accept (WTA) payment for ES that are complementary/competitive is less than or equal to the minimum WTA for the same ES produced in substitute or independent production relationships.     

An integrated analysis of the effects of local water institutions on irrigated agriculture outcomes in the arid western United States

Irrigation water rights and their governance structures constitute the foundation of local water institutions and profoundly influence water resource allocations, irrigated agricultural productivity and other consumptive water uses in the arid climate zones. This article explores the regional structures of irrigation water rights and water governance and empirically analyses the priority effects of water rights on irrigated agriculture at the micro level in Idaho, an arid and semiarid state in the western United States. We integrate a unique data set of water rights and water supplies with agricultural features and environmental characteristics into our empirical analysis. Results indicate that seniority in water resources allocation has significant, positive effects on both the average crop revenue and crop water use efficiency. Local water rights structures differ significantly in seniority and water sources from region to region. In response to the heterogeneity in local water rights structures, the aforementioned effect of allocative priority of water rights on average crop revenue per hectare and crop water productivity varies significantly, reaching up to an 87% difference, when measured across regions. In addition, the priority effects of water rights are nonlinear, which reflects the influence of historical patterns of water rights establishment on water institutions to date.     

Hospital economic impact from hemostatic matrix usage in cardiac surgery

Objective:

Improved health outcomes can result in economic savings for hospitals and payers. While effectiveness of topical hemostatic agents in cardiac surgery has been demonstrated, evaluations of their economic benefit are limited. This study quantifies the cost consequences to hospitals, based on clinical outcomes, from using a flowable hemostatic matrix vs non-flowable topical hemostatic agents in cardiac surgery.

Research design and methods:

Applying clinical outcomes from a prospective randomized clinical trial, a cost consequence framework was utilized to model the economic impact of comparator groups. From that study, clinical outcomes were obtained and analyzed for a flowable hemostatic matrix (FLOSEAL, Baxter Healthcare Corporation) vs non-flowable topical hemostats (SURGICEL Nu-Knit, Ethicon–Johnson &; Johnson; GELFOAM, Pfizer). Costing analyses focused on the following outcomes: complications, blood transfusions, surgical revisions, and operating room (OR) time. Cardiac surgery costs were analyzed and expressed in 2012 US dollars based on available literature searches and US data. Comparator group variability in cost consequences (i.e., cost savings) was calculated based on annualized impact and scenario testing.

Results:

Results suggest that if a flowable hemostatic matrix (rather than a non-flowable hemostat) was utilized exclusively in 600 mixed cardiac surgeries annually, a hospital could improve patient outcomes by a reduction of 33 major complications, 76 minor complications, 54 surgical revisions, 194 transfusions, and 242?h of OR time. These outcomes correspond to a net annualized cost consequence savings of $5.38 million, with complication avoidance as the largest contributor.

Conclusions:

This cost consequence framework and supportive modeling was used to evaluate the hospital economic impact of outcomes resulting from the usage of various hemostatic agents. These analyses support that cost savings can be achieved from routine use of a flowable hemostatic matrix, rather than a non-flowable topical hemostat, in cardiac surgery.