Social and Behavioral Sciences Commons^™

Review Of Coasean Economics: Law And Economics And The New Institutional Economics Edited By Steven Medema, Eric Bennett Rasmusen

Eric Bennett Rasmusen

A book review which talks about what kinds of papers I'd like to see written.

Observed Choice, Estimation, And Optimism About Policy Changes, Eric Bennett Rasmusen

Eric Bennett Rasmusen

A policy will be used more heavily in a particular time and place where its marginal cost is lower. The analyst who treats times and places as identical will overestimate the policy's net benefit, especially for policy intensities greater than exist in his sample. In regression analysis, the problem can be solved by instrumental variables and a correction for heteroskedasticity. In an example using state- level data, the technique substantially increases the estimated responsiveness of the illegitimacy rate to transfer payments.

Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams

Peter Cramton

Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values …

Affidavit Of Peter Cramton, Peter Cramton

Peter Cramton

Reply to comments on review of rules. For ISO New England.

The Efficiency Of The Fcc Spectrum Auctions, Peter Cramton

Peter Cramton

From July 1994 to July 1996, the Federal Communications Commission (FCC) conducted nine spectrum auctions, raising about $20 billion for the U.S. Treasury. The auctions assigned thousands of licenses to hundreds of firms. Were the auctions efficient? Did they award the licenses to the firms best able to turn the spectrum into valuable services for consumers? There is substantial evidence that the FCC's simultaneous ascending auction worked well. It raised large revenues. It revealed critical information in the process of bidding and gave bidders the flexibility to adjust strategies in response to new information. As a result, similar licenses sold …

Efficient Relocation Of Spectrum Incumbents, Peter Cramton, Evan Kwerel, John Williams

Peter Cramton

Changes in technologies and in consumer demands have made prior radio spectrum allocations far from efficient. To address this problem the FCC has recently reallocated spectrum for more flexible use in bands that are partially occupied by incumbent license holders. Often, it is necessary for the new license holder to relocate incumbents to make efficient use of the spectrum. Regulations structuring the negotiation between incumbent and new entrant can promote efficiency. In particular, giving the new entrant the right to move the incumbent with compensation can reduce negotiation costs and promote efficiency when there is private information about spectrum values …

Institutionalism: Intergovernmental Exchange, Administration-Centered Behavior, And Policy Outcomes In Urban Agencies, Herman L. Boschken

Herman L. Boschken

This article inquires about the sufficiency of institutional exchange theory in explaining the impacts of intergovernmental power structure on agency policy making. Based on rational behavior, transactional exchange, and game playing, this so called new institutionalism points to the degree of autonomy held by an agency in its collaboration with other government jurisdictions as a principal determinant of a patterned bias in agency policy outcomes. The author first summarizes theory arguments and derives hypotheses about agency outcomes that are skewed to favor some interests over others. He then reports results of a multiple regression analysis of a sample of forty-two …

A Review Of Iso New England's Proposed Market Rules, Peter Cramton, Robert Wilson

Peter Cramton

For ISO New England.

A Review Of Iso New England's Proposed Market Rules, Peter Cramton, Robert Wilson

Peter Cramton

This report reviews the proposed rules for restructured wholesale electricity markets in New England. We review the market rules, both individually and collectively, and identify potential problems that might limit the efficiency of these markets. We examine alternatives and identify the key tradeoffs among alternative designs. We believe that the wholesale electricity market in New England can begin on December 1, 1998. However, improvements are needed for long-run success. We have identified four major recommendations:

* Switch to a multi-settlement system.

* Introduce demand-side bidding.

* Adopt location-based transmission congestion pricing, especially for the import/export interfaces.

* Fix the pricing …

A Manifesto On Unemployment In The European Union, Jean-Paul Fitoussi, Franco Modigliani, Beniamino Moro, Dennis J. Snower, Robert Solow

Dennis Snower

No abstract provided.

Adjustment To The European Single Market: Inferences From Intra-Industry Trade Patterns, Marius Brulhart, Robert J.R. Elliott

Robert J R Elliott

No abstract provided.

The Economics Of Desecration: Flag Burning And Related Activities., Eric Bennett Rasmusen

Eric Bennett Rasmusen

When a symbol is desecrated, the desecrator obtains benefits while those who venerate the symbol incur costs. The approach to policy used in this paper is to ask whether the benefits are likely to exceed the costs. I conclude that they usually do not. Desecration is often motivated by a desire to reduce the utility of others, which generally is inefficient. Also, if desecration occurs, people have less incentive to create and maintain symbols. Symbols, like other produced goods, need property- rights protection if the outcome is to be efficient. Laws against desecration are a good way to provide this …

Unraveling In Matching Markets, Hao Li, Sherwin Rosen

hao li

We use a two-period matching model with initial uncertainty about productivities of participants to analyze incentives for early contracting or unraveling. Unraveling provides insurance in the absence of complete markets, but causes inefficient assignments. Unraveling is more likely, the smaller the applicant pool, the smaller the proportion of more promising applicants, and the greater the heterogeneity in the pool. Banning early contracts hurts firms and benefits less promising applicants; the effects on more promising applicants depend on how the gains from early contracts are shared. Ex post buyouts eliminate inefficient assignments, and more promising applicants always unravel.

Development And Application Of A Model To Estimate The Impact Of Type 1 Diabetes On Health-Related Quality Of Life, Shinyi Wu, Francois Sainfort, Russell Tomar, James L. Tollios, Dennis G. Fryback, Ronald Klein, Barbara Klein

Shinyi Wu

No abstract provided.

From Miranda To Mezzanatto: The Economics Of Self Incrimination, Eric Bennett Rasmusen

Eric Bennett Rasmusen

A 1995 Supreme Court decision allowed defendants in criminal trials to waive their rights to block use of information disclosed by them during the plea bargaining process. Does this really encourage plea bargaining?

Nuisance Suits, Eric Bennett Rasmusen

Eric Bennett Rasmusen

Nuisance suits can be defined a number of ways, explained a number of ways, and prevented in a number of ways. I survey them.

Ascending Auctions, Peter Cramton

Peter Cramton

A key question of auction design is whether to use an ascending-bid or a sealed-bid format. The critical distinction between formats is that an ascending auction provides the bidders with information through the process of bidding. This information is a two-edged sword. It may stimulate competition by creating a reliable process of price discovery, by reducing the winner’s curse, and by allowing efficient aggregations of items. Alternatively, the information may be used by bidders to establish and enforce collusive outcomes. Ex ante asymmetries and weak competition favor a sealed-bid design. In other cases, an ascending auction is likely to perform …

Open-Access Renewable Resources: Trade And Trade Policy In A Two-Country Model, M. Scott Taylor, James A. Brander

M. Scott Taylor

We develop a theory of resource management where the degree to which countries escape the tragedy of the commons is endogenously determined and explicitly linked to changes in world prices and other possible effects of market integration. We show how changes in world prices can move some countries from de facto open access situations to ones where management replicates that of an unconstrained social planner. Not all countries can follow this path of institutional reform and we identify key country characteristics (mortality rates, resource growth rates, technology) that divide world's set of resource rich countries into three categories. Category I …

Global Shift In Container Traffic And Its Implications For Economic Development Along The American Land Bridge, Herman L. Boschken

Herman L. Boschken

Since the “container revolution” in the 1970s, seaports on the Pacific Coast have been the engines of economic development, regionally, nationally and globally. But circumstances continue to change that threaten the long-term viability of the intermodal “land bridge” system that emerged from that revolution. These circumstances include railroads not maintaining rail lines critical to transcontinental container traffic and the shift in the locus of global production that raises the question of obsolescence for the existing infrastructure moving trade West to East from the Pacific Rim. The implications are enormous, especially for policy makers at the regional and local levels as …

Lifting The Veil Of Ignorance: Personalizing The Marriage Contract, Eric Bennett Rasmusen, Jeffrey Stake

Eric Bennett Rasmusen

Modern state laws only allow marriages in which each party can unilaterally divorce the other. We argue that the law should clearly permit parties to contract for more restrictive forms of marriage.

Evidence On Discrimination In Employment: Codes Of Color, Codes Of Gender, William A. Darity, Patrick L. Mason

Patrick L. Mason

No abstract provided.

The Simple Economics Of Easter Island: A Ricardo-Malthus Model Of Renewable Resource Use, M. Scott Taylor, James A. Brander

M. Scott Taylor

We present a simple general equilibrium model of renewable resource and population dynamics that may explain the rise and fall of Easter Island's civilization. The model generates a system similar to the Lotka-Volterra predator-prey model. In our formulation man is the predator and the resource base is the prey, leading to the possibility of feast and famine cycles of rising and falling population and resource stocks. Such cycles tend to arise when fertility is high and the resource base grows slowly. We speculate that such cycles may often cause violent conflict and describe other civilizations that may have declined because …

Simultaneous Ascending Auctions With Package Bidding, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson

Peter Cramton

An effective package bidding mechanism addresses three problems: the exposure problem (the risks a bidder faces in trying to construct an efficiently large combination of licenses), the free-rider problem (the difficulties small bidders have in beating those who bid for larger packages of licenses), and the computational complexity problem (which arises from the fact that the number of possible combinations of licenses is much larger than the number of licenses). Package bidding offers the possibility of an improvement over individual-license bidding only when there are strong complementarities and the pattern of those complementarities varies across bidders. Package bidding works satisfactorily …

Auctioning Securities, Peter Cramton, Lawrence M. Ausubel

Peter Cramton

Treasury debt and other divisible securities are traditionally sold in either a pay-your-bid (discriminatory) auction or a uniform-price auction. We compare these auction formats with a Vickrey auction and also with two ascending-bid auctions. The Vickrey auction and the alternative ascending-bid auction (Ausubel 1996) have important theoretical advantages for sellers. In a setting without private information, these auctions achieve the maximal revenue as a unique equilibrium in dominant strategies. In contrast, the pay-your-bid, uniform-price, and standard ascending-bid auction admit a multiplicity of equilibria that yield low revenues for the seller. We show how these results extend to a setting where …

The Observed Choice Problem In Estimating The Cost Of Policies, Eric Bennett Rasmusen

Eric Bennett Rasmusen

A very short version of my Public Choice paper which makes the basic point that OLS estimation of the costs of deliberately chosen policies will be biased downwards.

Anatomy Of Policy Complementarities, Michael J. Orszag, Dennis Snower

Dennis Snower

No abstract provided.

Domestic Partnership And Same-Sex Relationships: A Marketplace Innovation And A Less Than Perfect Institutional Choice, Nancy J. Knauer

Nancy J. Knauer

The struggle for the recognition and protection of same-sex relationships is at the forefront of the contemporary gay and lesbian civil rights agenda. Whereas the push for same-sex marriage and parenting rights has met with mixed results in the courts and the legislatures, an impressive array of organizations, including Fortune 500 companies, colleges, nonprofit corporations, and municipalities, now extend benefits to the same-sex partners of their employees. This level of success raises a provocative question regarding the potential role of institutional employers in the larger on the agenda for progressive social change. Domestic partnership benefits are a creature of the …

Old And New Theories Of Industry Clusters, Edward J. Feser

Edward J Feser

The paper reviews the broad range of theories and ideas that constitute, often implicitly, the logic behind strategic cluster policies. The title of the paper notwithstanding, there is no theory of industry clusters, per se. Even Porter’s (1990) seminal contribution is more a theory of firm competitiveness than clusters. There is, instead, a variety of older and newer theories of 1) the interrelationships between economic actors that clusters describe, and 2) the implications of such interrelationships for economic growth and development. Industry clusters have proven a useful way of characterizing webs of relationships between and among firms and other institutions. …

Assessing The Impact Of Prompt Corrective Action On Bank Capital And Risk, Kevin T. Jacques, Raj Aggarwal

Kevin T Jacques

No abstract provided.

The Use Of Replacement Workers In Union Contract Negotiations: The U.S. Experience, 1980-1989, Peter Cramton, Joseph Tracy

Peter Cramton

It is argued in many circles that a structural change occurred in U.S. collective bargaining in the 1980s. Strike incidence declined, dispute incidence increased, and the composition of disputes shifted away from strikes and toward holdouts. We investigate the extent to which the hiring of replacement workers can account for these changes. For a sample of over 300 major strikes since 1980, we estimate the likelihood of replacements being hired. We find that the risk of replacement is lower for bargaining units with more experienced workers, and declines during tight labor markets. The composition of disputes shifts away from strikes …