Breaking Collusion in Auctions through Speculation: An Experiment on CO2 Emission Permit Markets

The European Emission Trading Scheme (EU‐ETS) has chosen to adopt an auctioning procedure to initially allocate CO₂ emission permits. Free allocation of permits will become an exception for the third phase (2013–2020) and most firms will have to buy all their permits on the market or via auctions. The ability of bidders to collude is a key concern about the design of the auction format. To counter collusion, the auction can be open to bidders without compliance obligations (speculators). This paper aims at studying experimentally speculation as a collusion‐breaking device in two different auction mechanisms: the uniform‐price sealed‐bid auction and the ascending clock auction. Our results suggest that a uniform sealed‐bid auction open to speculators should be chosen from a revenue maximization point of view. In this mechanism, compliance agents adopt an aggressive strategy toward speculators. This strategy significantly increases the seller's revenue, compared to the more collusive clock auction. In the latter, on the contrary, bidders accommodate speculators, letting them buy permits in the auction and buying their necessary permits on the secondary market. However, as opening the auction to speculators deteriorates efficiency, the regulator faces a trade‐off between these two objectives.     

Trade Restrictiveness and Pollution

This paper proposes a trade restrictiveness indicator that explicitly incorporates environmental externalities. The index employs directional distance functions and uses indicators (i.e., differences rather than ratios) modified to account for and evaluate efficiency changes in the face of simultaneous and multidimensional trade and environmental policy reforms. The index is made up of two components, one for production and one for consumption. Our overall trade restrictiveness indicator is accordingly the difference of the two. The properties of the indicator are developed and discussed together with its estimation.     

The Effect of Tax-Based Savings Incentives on Government Revenue

There is an unresolved debate on the effect of tax-based savings incentives on government revenue. The conventional wisdom on tax-assisted saving plans (TASPs) holds that they reduce public savings, but may raise national savings by stimulating private savings. Feldstein (1995) has challenged the view that TASPs reduce government revenue. According to Feldstein, ‘some of the increase in personal saving raises the corporate capital stock, and the return on this additional capital raises corporate tax payments’. When the additional corporate income tax revenue is taken into account, ‘the revenue loss associated with IRAs [Individual Retirement Accounts] either is much smaller than has generally been estimated or is actually a revenue gain’. This paper extends Feldstein's analysis to incorporate international considerations, differences in tax structures and alternative values for key parameters. We show that the result presented by Feldstein represents a special case that does not lead to broad generalisations. We also show that, under most conditions, the tenets of conventional wisdom that TASPs reduce government revenue are likely to hold, but that the magnitude of the effect may not be large. Finally, we suggest that the focus of research on the savings effects of TASPs is justifiable in a closed economy, where domestic savings affect domestic investment, but is not useful for policy development in small open economies. JEL classification: H2, H3, H6.     

Career Paths,Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized?

This paper studies the implications of learning‐by‐doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low‐skill jobs suffer from a poaching behavior by firms with high‐skill jobs, causing a shortage of low‐skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high‐skill jobs and subsidizing the output of low‐skill jobs, restores market efficiency and reduces youth unemployment.     

A tale of three schools: insights on autocorrelations of short-horizon stock returns

This article reexamines the autocorrelation patterns of short-horizonstock returns. We document empirical results which imply thatthese autocorrelations have been overstated in the existingliterature. Based on several new insights, we provide supportfor a market efficiency-based explanation of the evidence. Ouranalysis suggests that institutional factors are the most likelysource of the autocorrelation patterns.     

Restaurant Prices and the Minimum Wage

In this paper, we examine the effect of the minimum wage on restaurant prices. We contribute both to the study of economic impact of the minimum wage and to the study of microeconomic patterns of price stickiness. For this purpose, we use a unique data set of individual price quotes collected to calculate the Consumer Price Index in France and we estimate a price rigidity model based on a flexible rule. We find a positive and significant impact of the minimum wage on prices. The effect of the minimum wage on prices is, however, very protracted. A change in the minimum wage takes more than a year to fully pass through to retail prices.     

Introduction to the Special Issue on Behavioral and Experimental Public Economics

The workshop of the Association for Public Economic Theory on behavioral and experimental public economics was held at Ecole Normale Supérieure de Lyon, Université de Lyon, from June 24 to June 26, 2008. Thirty papers were presented in addition to keynotes by Charlie Plott and John List. The focus of the workshop was to test theoretical models using experimental methods to increase our understanding of the efficiency of mechanisms supporting the provision of public goods, social cooperation, and voting systems. This special issue aims at showing how lively and diversified the ongoing experimental research in public economics has come to be. We highlight three topics in particular: the power of voting and legal enforcement systems, the efficiency of various institutions to support cooperation in social dilemma games, and auctions.     

兰州及其周边发展乡村旅游的SWOT分析

在系统分析乡村旅游概念的基础上，对兰州市及其周边发展乡村旅游进行了SWOT分析，详细的阐述了兰州市及其周边所面临的优势、弱势、机遇和挑战。     

Real Estate Prices and Corporate Investment: Theory and Evidence of Heterogeneous Effects across Firms

In this paper, we investigate the effect of real estate prices on productive investment. We build a theoretical framework of firms' investment with credit rationing and real estate collateral. We show that real estate prices affect firms' borrowing capacities through two channels. An increase in real estate prices raises the value of the firms' pledgeable assets and mitigates the agency problem characterizing the creditor–entrepreneur relationship. It simultaneously cuts the expected profit due to the increase in the cost of inputs. We test our theoretical predictions using a large French database. We do find heterogeneous effects of real estate prices on productive investment depending on the position of the firms in the sectoral distributions of real estate holdings.