Discriminatory Price Auctions in Electricity Markets: Low Volatility at the Expense of High Price Levels

A pay-as-offered or discriminatory price auction (DPA) has been proposed to solve the problem of inflated and volatile wholesale electricity prices. Using the experimental method we compare the DPA with a uniform price auction (UPA), strictly controlling for unilateral market power. We find that a DPA indeed substantially reduces price volatility. However, in a no market power design, prices in a DPA converge to the high prices of a uniform price auction with structural market power. That is, the DPA in a no market power environment is as anti-competitive as a UPA with structurally introduced market power.     

Method in Experiment: Rhetoric and Reality

The methodological ideal of experimentalists, E, is easily stated: derive a testable hypothesis, H, from a well-specified theory, T; implement experiments with a design; implicitly in the latter are auxiliary hypotheses, A, that surface in the review/discussion of completed research reports (payoffs are 'adequate,' Ss are 'relevant,' instructions, context are 'clear,' etc.). We want to be able to conclude, if statistical test outcomes support not-H, that T is 'falsified.' But this is not what we do; rather we ask if there is a flaw in the test, i.e. not-A is supported, and we do more experiments. This is good practice—much better than the statistical rhetoric of falsificationism. Undesigned social processes allow E to accumulate technical and instrumental knowledge that drive the reduction of experimental error and constitute a more coherent methodology than falsificationism.     

ADVERSE SELECTION IN ELECTRONIC MARKETS: EVIDENCE FROM ONLINE STAMP AUCTIONS

We analyze adverse selection costs in online stamp auctions, based on a comparison of prices on eBay with those of matched stamps at a specialty stamps auction site in the U.S., Michael Rogers, Inc. (MR), which we know a priori has low quality uncertainty. We find that buyer prices are 10–15% lower on eBay as compared to MR, and the price difference, increases with the value of the stamps. Consistent with this adverse selection discount we find that the seller reputation mechanism on eBay has an economically modest, although statistically significant, effect on auction price and probability of sale.     

The impact of stakeholder heterogeneity on risk perceptions in technological innovation

Managing risk has been widely acknowledged as a crucial managerial task in the development of new technology. More recently, the acceptance of new technologies has increasingly been influenced by secondary stakeholders, some of which are difficult to identify, or whose concerns are not easily reconciled. This paper develops a conceptual framework based on the management of technology and research & development literature, stakeholder theory, risk and social judgment to describe how traditional approaches based on reducing uncertainties through estimating probabilities may not work for social uncertainties; different heuristics are needed to understand and resolve such heterogeneous stakeholder perspectives. We contribute to the discourse by describing how risk perceptions among stakeholders vary, and how this may change over time. The framework suggests that the perception of primary stakeholder towards a specific innovation is ‘Standard’ when information is well known, but becomes riskier when information is unclear. For secondary stakeholders, when there is a low degree of imperfect information, the stakeholder relationship is an ‘Irritant’ but becomes increasingly ‘Dangerous’ when information becomes ambiguous. We conclude with implications for management and future research.     

Nontariff distortions of international trade: Some preliminary empirical evidence

Zusammenfassung Nichttarif?re Verzerrungen des internationalen Handels: Einige vorl?ufige empirische Befunde. — In dieser Studie werden — mit Hilfe einer Auswahl von Business International zusammengestellter internationaler Preise — Wert?quivalente für nichttarif?re Handelsschranken durch Zerlegung der Preise in ihre Komponenten gesch?tzt. Nachdem l?nderm?\ige Preisunterschiede für eine genau beobachtete Auswahl von Gütern berechnet wurden, werden die gesch?tzten Anteile, die auf Z?lle, Abgaben und andere direkte Steuern, Transportkosten usw. zurückzuführen sind, von diesen Zahlen abgezogen. Der verbleibende unerkl?rte Rest wird dann als Ma\ für die wertm?\ige Inzidenz von nichttarif?ren Handelsschranken interpretiert. In Frankreich und in etwas geringerem Ausma\ in den Vereinigten Staaten zeigen die Ergebnisse, da\ die meisten beobachteten Preisunterschiede auf Steuern, Z?lle und Abgaben (Frankreich) zurückgeführt werden k?nnen. Unerkl?rte Reste in H?he von 30 bis 50 vH für Schweden und Japan deuten dagegen auf sehr bedeutende andere handelsbeschr?nkende Ma\nahmen in diesen L?ndern hin. Da eine gesonderte Untersuchung zeigt, da\ h?here Handelskosten nicht für diese Unterschiede verantwortlich sein k?nnen, würde eine ausführliche Untersuchung der schwedischen und japanischen Systeme nützlich sein, um genau die Art der Faktoren festzustellen, die diese Unterschiede verursachen. Eine gesonderte (Rang-) Korrelationsanalyse der Preisunterschiede mit der H?ufigkeit von nichttarif?ren Beschr?nkungen in der Zusammenstellung des GATT zeigt entweder eine negative oder eine nicht-signifikante Beziehung zwischen diesen Variablen. Dies l?\t darauf schlie\en, da\ die Zusammenstellung des GATT kein unverzerrtes Bild der relativen Bedeutung von nichttarif?ren Hemmnissen in verschiedenen Sektoren geben dürfte.

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Résumé Les distorsions nontarifaires du commerce international: Quelques empiriques evidences préliminaires. — En utilisant un échantillon des prix internationaux compilé par Business International cette étude estime les équivalents ad valorem des obstacles nontarifaires par une décomposition des portions de prix. Après avoir computé les differences de prix à travers les pays pour une sélection des produits rigoureusement controllée nous dérivons de ces données les estimations de la portion réduirable au tarif, aux taxes indirectes et aux autres taxes directes, aux co?ts de transport etc. Puis nous interprétons les quantités restantes pas expliquées comme mesure de l–incidence ad valorem des restrictions nontarifaires du commerce extérieur. Les résultats montrent que pour la France et, dans une mesure plus faible pour les Etats-Unis, la plupart des differences des prix observées peut être expliquée par les taxes, les tarifs et les imp?ts (France). Cependant les quantités restantes et pas expliqueés pour la Suède et le Japon d–une magnitude de 30 à 50 pourcent montrent que des autres mesures de commerce restrictives sont très importantes dans ces pays. Comme une analyse spéciale montre que les co?ts plus hauts du commerce de détail pour la Suède et le Japon ne peuvent pas expliquer les disparités, une investigation détaillée des systèmes de la Suède et du Japon pourrait être utile pour déterminer la nature exacte des facteurs causant ces differences. Une analyse séparée de corrélation des rangs des differences de prix avec la fréquence reportée des obstacles nontarifaires dans l–inventaire de GATT montre une association négative ou non-significative entre ces variables. Ces résultats suggèrent que peut-être l–inventaire des obstacles nontarifaires ne donne pas une illustration sans défiguration de l–importance relative des restrictions nontarifaires dans les secteurs différents.

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Resumen Distorsiones no tarifarias en el comercio internacional: Algunas evidencias empíricas preliminares. — Empleando una muestra de precios internacionales compilados por Business International, se estiman en el presente trabajo equivalentes ad valorem de barrieras no tarifarias a traves de la descomposición de partes de precios. Después de computar diferencias de precios entre países para una selección de productos estrechamente controlados, se descuentan de estas cifras estimaciones de los montos atribuibles a las tarifas, impuestos a la compraventa y otros impuestos directos, costos de transporte, etc. El restante residual no explicado se interpreta entonces como una medida de la incidencia ad valorem de las barrieras no tarifarias del comercio. En Francia y, en menor medida en los EEUU, los resultados muestran, que la mayor parte de las diferencias de precios observadas se pueden atribuir a impuestos, tarifas y derechos (Francia). Sin embargo, residuales no explicados del orden de 30% a 50% en Suecia y Japón sugieren, que otras medidas restrictivas del comercio son muy importantes en estos países. Ya que un análisis separado muestra, que costos de venta al detalle mayores no pueden ser responsables por estas disparidades, parece que una investigación detallada de los sistemas sueco y japonés sería muy útil para determinar la naturaleza exacta de los factores que causan estas diferencias. Un análisis de correlación de rango seperado para las diferencias de precios con la frecuencia de las barrieras no tarifarias del inventario del GATT anteriormente mencionadas, muestra una asociación negativa o no significativa para estas variables. Estos resultados sugieren, que el inventario de barrieras no tarifarias puede no estar dando un cuadro sin sesgos de la importancia relativa de las restricciones no tarifarias en diferentes sectores.

     

Review of Microstructural Evidence of Magmatic and Solid-State Flow

Evidence of magmatic flow includes: (a) parallel to sub-parallel alignment of elongate euhedral crystals (e.g., of feldspar or hornblende) that are not internally deformed, (b) imbrication (‘tiling’) of elongate euhedral crystals that are not internally deformed, (c) insufficient solid-state strain in regions between aligned or imbricated crystals to accommodate phenocryst rotation, (d) elongation of microgranitoid enclaves without plastic deformation of the minerals, (e) magmatic flow foliations and elongate microgranitoid enclaves deflected around xenoliths, and (f) schlieren layering (if due to flow sorting) in the absence of plastic deformation of the minerals involved. These features are consistent with rotation of crystals in a much weaker medium, namely a melt phase, at a stage when the magma has become viscous enough to preserve the alignment. Evidence of solid-state flow includes: (a) internal deformation and recrystallization of grains, (b) recrystallized “tails,” (c) elongation of recrystallized aggregates (e.g. of quartz and mica), (d) grainsize reduction, (e) fine-grained folia anastomosing around less deformed relics, (f) microcline twinning, (g) myrmekite, (h) flame perthite, (i) boudinage of strong minerals, typically with recrystallized aggregates of weaker minerals (e.g. quartz and mica) between the boudins, (j) foliation passing through, rather than around enclaves, and (k) heterogeneous strain with local mylonitic zones. Several criteria suggest “submagmatic flow,” including recrystallized feldspar, inferred transitions from magmatic imbrication to solid-state S/C arrangements, evidence of c-slip in quartz, and especially evidence of migration of residual melt into lower-pressure sites. Recent experimental studies indicate that a change from grain-supported flow to suspension flow typically occurs in deforming magmas at melt contents of between 20% to 40%, and that large amounts of strain may accumulate in magmas without being recorded by the final fabric. At lower melt percentages, perhaps as low as a few percent, depending on the minerals and their shapes, strain may be accommodated by: (a) melt-assisted grain-boundary sliding, (b) contact-melting assisted grain-boundary migration, (c) strain partitioning into melt-rich zones, (d) intracrystalline plastic deformation (c-slip in quartz indicating plastic deformation at temperatures near the granite solidus), and (f) transfer of melt to sites of low mean stress. The only indication of strain in the absence of crystal plasticity may be an alignment of crystals. Moreover, magmatic flow microstructures may be destroyed by fracturing, crystal plasticity and recrystallization before the magma reaches its solidus. Many rocks show evidence of solid-state flow superimposed on magmatic flow. Evidence of magmatic flow is commonly preserved in deformed felsic metamorphic rocks: for example the alignment of rectangular K-feldspar megacrysts and of microgranitoid enclaves. However, absence of alignment does not preclude a magmatic origin for K-feldspar megacrysts in felsic gneisses, as magmatic flow may cease before the magma becomes viscous enough to preserve an alignment.     

Using Laboratory Experiments in Logistics and Supply Chain Research

Laboratory experiments provide an underutilized methodology for subjecting research in logistics and supply chain management to rigorous scientific scrutiny. As discussed in this paper, by following established procedures researchers can create an economic system in which behavior can be observed and replicated. With the ability to control the institution and the environment, researchers have complete information and can exogenously manipulate treatment variables, neither of which may be feasible in field work. We also address many of the reservations that skeptics of laboratory experiments often express including issues of realism, participant sophistication, and payoff stakes. We then provide several examples where experiments have been used to study issues relevant to logistics and supply chain management including auctions, wholesale practices in gasoline markets, inventory replenishment, liberalization of the electric power industry, and deregulation of the natural gas markets. Finally, we identify several additional areas where laboratory experiments could be informative.