DEMAND REDUCTION IN MULTI‐UNIT AUCTIONS WITH VARYING NUMBERS OF BIDDERS: THEORY AND EVIDENCE FROM A FIELD EXPERIMENT*

Recent auction theory and experimental results document strategic demand reduction by bidders in uniform‐price auctions. The present article extends this area of research to consider the effects of varying the number of bidders. Our theoretical model predicts that demand reduction should decrease with an increase in the number of bidders. Considerable demand reduction remains even in the asymptotic limit, although truthful bidding yields profits very close to those of equilibrium play. We experimentally confirm several of our predictions by examining bidding behavior of subjects in an actual marketplace, auctioning dozens of sportscards using both uniform‐price and Vickrey auction formats.     

Online ads and offline sales: measuring the effect of retail advertising via a controlled experiment on Yahoo!

A randomized experiment with 1.6 million customers measures positive causal effects of online advertising for a major retailer. The advertising profitably increases purchases by 5%. 93% of the increase occurs in brick-and-mortar stores; 78% of the increase derives from consumers who never click the ads. Our large sample reaches the statistical frontier for measuring economically relevant effects. We improve econometric efficiency by supplementing our experimental variation with non-experimental variation caused by consumer browsing behavior. Our experiment provides a specification check for observational difference-in-differences and cross-sectional estimators; the latter exhibits a large negative bias three times the estimated experimental effect.     

Ethics Matter: Moderating Leaders’ Power Use and Followers’ Citizenship Behaviors

Followers’ perceptions of their leaders’ ethics have the potential to impact the way they react to the influence of these leaders. The present study of 365 U.S. Air Force Academy Cadets examined how followers’ perceptions of their leaders’ ethics moderated the relationships found between the leaders’ use of power, as conceptualized by French and Raven (Studies in social power, 1959), and the followers’ contextual performance. Our results indicated that leaders’ use of expert, referent, and reward power was associated with higher levels of organizational citizenship behaviors (OCBs) among their followers when the followers perceived these leaders to be more ethical. Moreover, when followers perceived their leaders to be less ethical, these followers reported lower levels of OCBs when their leaders’ utilized referent power. Practical implications, limitations, and future research are also discussed.     

De controverse aangaande heterogene kapitaalgoederen

Summary The so-called Cambridge-Cambridge controversy concerning heterogeneous capital goods is reconsidered in this article. Firstly, the neoclassical theory as it has been criticized is summarized by means of a formulation of the production function with a variable or constant elasticity of substitution between labour and capital. This VOCES-function includes the Cobb-Douglas and the CES functions as special cases. In an appendix to this article, the alternative Sraffa system is presented in accordance with Sraffa's remark that there is no harm in adopting the assumption of constant returns as a temporary working hypothesis. Sraffa takes only a sideways look at the (double) switching of techniques.Samuelson's surrogate production function and the critical exposition of it by Garegnani are confronted with Hick's analysis of the wage-interest frontier. The impact of it on the relation between capital intensity and interest makes Garegnani's assumption of an integrated industry in this connection not fully acceptable in the present author's view.Both Nuti and Hicks have shown in their recent articles in theEconomic Journal (1970) that it can be helpful to follow what Hicks calls a Neo-Austrian approach. Already in the thirties Hayek and Eucken made it clear that production may be conceived as a process that connects dated inputs and outputs with capital goods as intermediate products. In the opinion of the present writer, this point of view has been too much neglected. In his doctoral thesis (1970) the author has, therefore, developed an isochronic isoquant analysis. This approach involves the formulation of a general factor period as a basis for a cost analysis in terms of immediate costs of inputs and the average investment period. In the present article, this method of analysis is used for the direct derivation of the wage-interest frontier without resorting to wage-interest curves and by stressing the impact ,of the production relations themselves on that frontier.It follows that a Ricardian analysis, as more clearly expounded in the (neo-)Austrian approach than in the neoclassical theory, has to be preferred both for further analyzing production and for a better understanding of capital and interest, and that this conclusion stems already from thirty years ago.Dit artikel is de nadere uitwerking van een bijdrage voor de interuniversitaire bijeenkomst over algemeae economie, op 24 september 1971 gehouden aan de Universiteit van Amsterdam. Voor de stimulerende opmerkingen van met name prof. dr. J. G. Knol en drs. W. van Drimmelen wil ik graag mijxn dank uitspreken.