Information,market power,and price volatility

We consider demand function competition with a finite number of agents and private information. We show that any degree of market power can arise in the unique equilibrium under an information structure that is arbitrarily close to complete information. Regardless of the number of agents and the correlation of payoff shocks, market power may be arbitrarily close to zero (the competitive outcome) or arbitrarily large (so there is no trade). By contrast, price volatility is always lower than the variance of the aggregate shock across all information structures. Alternative trading mechanisms lead to very distinct bounds as a comparison with Cournot competition establishes.     

Smoking and Politics

Anti-smoking lobbyists regularly call for government intervention to prohibit smoking in 'public places'. Tibor Machan, Professor of Philosophy at the University of Auburn, Alabama, contends that such differences of opinion should be resolved in the adaptable market, not subject to inflexible law.     

Bidding ‘as if’ risk neutral in experimental first price auctions without information feedback

Experimental research on first price sealed bid auctions has usually involved repeated settings with information feedback on winning bids and payoffs after each auction round. Relative to the risk neutral Nash equilibrium, significantly higher bidding has been reported. The present paper reports the results of experimental first price auctions with n=7 where feedback on payoffs and winning bids is withheld. Under these conditions, average bidding is below the risk neutral Nash equilibrium prediction but converges to it with repetition.

---

Electronic Supplementary Material  The online version of this article () contains supplementary material, which is available to authorized users.      

Are Economists Amoral?

Economists have long based their analysis of the behaviour of the economic'actor'as homo economicus, an individual maximising his or her own interest or'utility'. Tibor Machan, Professor of Philosophy at Auburn University, Alabama, argues that this approach neglects important elements that condition economic activity — not least, the role of moral considerations.     

A framework for the analysis of global, regional and local business networks

In this article we are dealing with the global, regional and local questions of the business. We raise the following question: is there a relation between network management (networking) and the spatial type of the network. We make a cross analysis of networking and spatial types of the network. The paper builds on the model of networking (Ford et al., 2002; Ford et al., 2003; Håkansson et al., 2009), the network paradoxes (Håkansson and Ford, 2002) and the model of 6 Cs (Ritter & Ford, 2006). We emphasize the strategic importance of the interpretation of network pictures. In order to answer the research question we create a theoretical conceptual frame called the Spatial Networking Matrix. We use the method of explorative expert interview in order to introduce some experiences of company leaders and managers concerning networking and spatiality. We conclude that after further development, the Spatial Networking Matrix can help to analyze networking and spatial types of networks at once, deepen the understanding of the real business world and through all of these, be a useful tool for business practice.     

Effort and Performance: What Distinguishes Interacting and Noninteracting Groups from Individuals?

We study how group membership affects behavior both when group members can and cannot interact with each other. Our goal is to isolate the contrasting forces that spring from group membership: a free‐riding incentive leading to reduced effort and a sense of social responsibility that increases effort. In an environment with varying task difficulty and individual decision making as the benchmark, we show that the free‐riding effect is stronger. Group members significantly reduce their effort in situations where they share the outcome but are unable to communicate. When group members share outcomes and can interact, they outperform groups without communication and individuals. We show that these groups do as well as the best constituent member would have done on his or her own.     

Distorted Trade Barriers: A Dissection of Trade Costs in a “Distorted Gravity” Model

It is common in the trade literature to use iceberg transport costs to represent both tariffs and shipping costs alike. However, in models with monopolistic competition these are not identical trade restrictions. This difference is driven by how the two costs affect the extensive margin. We illustrate these differences in a gravity model. We show theoretically that trade flows are more elastic with respect to tariffs than transport costs and find a linear relationship between the elasticities with respect to tariffs, iceberg transport costs, and fixed market costs. We empirically validate these results using data on US product‐level imports.     

An Application of the English Clock Market Mechanism to Public Goods Games

This paper reports an experimental study of the public goods game in which contributions are not submitted all at once but incrementally as coordinated in real time by a clock. Individuals press a button as soon as the clock equals their willingness to contribute. By providing information about the point at which subjects stop further contributions we find evidence for conditionally cooperative behaviour: A subject's decision to stop contributing induces an immediate reaction of the other group members.