Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
- Institution
- Keyword
-
- Market Design (112)
- Auctions (109)
- Electricity and Gas (49)
- Telecommunications (46)
- Natural Resources (23)
-
- Bargaining (20)
- Environmental Markets (20)
- Collusion (16)
- Industrial Organization (16)
- Finance (10)
- Labor (10)
- Experimental Economics (5)
- Major Works (5)
- Mechanism Design (5)
- Healthcare (3)
- Transportation (3)
- Auction design (2)
- Corporate Governance (2)
- Matching (2)
- CMS auctions (1)
- Capacity market (1)
- Clock auctions (1)
- Durable medical equipment auctions (1)
- Electricity auctions (1)
- Electricity market design (1)
- Epidemiology (1)
- Financial crisis (1)
- Firm energy market (1)
- Forward market (1)
- Market design (1)
Articles 121 - 148 of 148
Full-Text Articles in Social and Behavioral Sciences
Auctions And Takeovers, Peter Cramton
Auctions And Takeovers, Peter Cramton
Peter Cramton
Under Delaware law (the predominant corporate law in the US), when a potential acquirer makes a serious bid for a target, the target's board of directors is required to act as would "auctioneers charged with getting the best price for the stock-holders at a sale of the company." (Revlon v. MacAndrews & Forbes, 173). The target's board may not use defensive tactics that destroy the auction process and must attempt to seek higher bids. Similarly, the Williams Act requires takeover bids to remain open for at least 20 business days on the grounds that the delay facilitates auctions. This preference …
Using Auctions To Divest Generation Assets, Peter Cramton, Lisa J. Cameron, Robert Wilson
Using Auctions To Divest Generation Assets, Peter Cramton, Lisa J. Cameron, Robert Wilson
Peter Cramton
In most states, ratepayers will compensate utilities for their stranded costs. As a result, these costs must be measured as accurately as possible, in a manner that is easily understood by all concerned parties. We describe the options for measuring stranded costs and argue that a simultaneous ascending auction is the best approach.
Package Bidding For Spectrum Licenses, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Package Bidding For Spectrum Licenses, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Peter Cramton
The FCC was an innovator in adopting the rules of the simultaneous ascending-price auction for its sales of spectrum licenses. While these rules have performed well in the auctions conducted so far (and would perform even better with the design improvements suggested in our first report), there are two inherent limitations in any design that seeks to assign and price the licenses individually. First, such designs create strategic incentives for bidders interested in multiple licenses that are substitutes to reduce their demands for some of the licenses in order to reduce the final prices of the others; this is the …
Auction Design Enhancements For Non-Combinatorial Auctions, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Auction Design Enhancements For Non-Combinatorial Auctions, Peter Cramton, John Mcmillan, Paul Milgrom, Bradley Miller, Bridger Mitchell, Daniel Vincent, Robert Wilson
Peter Cramton
We evaluate a number of possible enhancements to the FCC auctions. We consider only changes to the current auction rules that stay within the basic format of the simultaneous multiple round auction for individual licenses. This report summarizes and extends our e-mail exchanges with FCC staff on this topic. A subsequent report will cover auctions with combination bids. Overall, the FCC spectrum auctions have been an enormous success. However, there are two design goals in the auction where important improvement can be achieved within the basic rules structure. These are restricting collusion among bidders and reducing the time taken to …
Auction Design For Standard Offer Service, Peter Cramton, Andrew Parece, Robert Wilson
Auction Design For Standard Offer Service, Peter Cramton, Andrew Parece, Robert Wilson
Peter Cramton
During the transition to a competitive electricity market, when a consumer does not select an electricity provider, who provides service to the customer and at what price? An auction for this "standard offer service" is a market-based way to assign the service responsibility and to determine its price. We explore the design issues in establishing rules for such an auction.
Reply Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Reply Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Peter Cramton
For Antigone and Devco.
Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Statement On The Effect Of Nextwave’S Participation In The C-Block Auction On Antigone And Devco, Peter Cramton
Peter Cramton
For Antigone and Devco.
The Fcc Spectrum Auctions: An Early Assessment, Peter Cramton
The Fcc Spectrum Auctions: An Early Assessment, Peter Cramton
Peter Cramton
This paper analyzes six spectrum auctions conducted by the Federal Communications Commission (FCC) from July 1994 to May 1996. These auctions were simultaneous multiple-round auctions in which collections of licenses were auctioned simultaneously. This auction form proved remarkably successful. Similar items sold for similar prices and bidders successfully formed efficient aggregations of licenses. Bidding behavior differed substantially in the auctions. The extent of bidder competition and price uncertainty played an important role in determining behavior. Bidding credits and installment payments also played a major role in several of the auctions.
Synergies In Wireless Telephony: Evidence From The Broadband Pcs Auctions, Peter Cramton, Lawrence M. Ausubel, R. Preston Mcafee, John Mcmillan
Synergies In Wireless Telephony: Evidence From The Broadband Pcs Auctions, Peter Cramton, Lawrence M. Ausubel, R. Preston Mcafee, John Mcmillan
Peter Cramton
We examine bid data from the first two broadband PCS spectrum auctions for evidence of value synergies. First, we estimate a benchmark regression for the determinants of final auction prices. Then, we include variables reflecting the extent to which bidders ultimately won or already owned the adjacent wireless properties. Consistent with geographic synergies in an ascending-bid auction, prices were higher when the highest-losing bidder had adjacent licenses. The footprints of winning bidders suggest that they were often successful in realizing these synergies.
Deficit Reduction Through Diversity: How Affirmative Action At The Fcc Increased Auction Competition, Peter Cramton, Ian Ayres
Deficit Reduction Through Diversity: How Affirmative Action At The Fcc Increased Auction Competition, Peter Cramton, Ian Ayres
Peter Cramton
In recent auctions for paging licenses, the Federal Communications Commission has granted businesses owned by minorities and women substantial bidding credits. In this article, Professors Ayres and Cramton analyze a particular auction and argue that the affirmative action bidding preferences, by increasing competition among auction participants, increased the government’s revenue by $45 million. Subsidizing the participation of new bidders can induce established bidders to bid more aggressively. The authors conclude that this revenue-enhancing effect does not provide a sufficient constitutional justification for affirmative action—but when such justification is independently present, affirmative actions can cost the government much less than is …
The Case For Affirmative Auction: From Conscience To Coffers, Ian Ayres, Peter Cramton
The Case For Affirmative Auction: From Conscience To Coffers, Ian Ayres, Peter Cramton
Peter Cramton
The Federal Communications Commission’s auction of wireless communication licenses last fall has been criticized as a huge Government giveaway because of the substantial bidding preferences granted to women and minorities. In March, Federal court action delayed the FCC’s June auction until August to consider the legality of similar preferences. But far from being a giveaway, affirmative action actually increased the total amount paid to the Government by about $15 million. Women and minority bidders were granted a 40 percent bidding credit on certain licenses and the right to pay the Government in installments over 10 years at a favorable rate. …
Money Out Of Thin Air: The Nationwide Narrowband Pcs Auction, Peter Cramton
Money Out Of Thin Air: The Nationwide Narrowband Pcs Auction, Peter Cramton
Peter Cramton
The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple-round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success—an excellent example of bringing economic theory to bear on practical problems of …
Decption And Mutual Trust: A Reply To Strudler, Peter Cramton, J Gregory Dees
Decption And Mutual Trust: A Reply To Strudler, Peter Cramton, J Gregory Dees
Peter Cramton
Alan Strudler has written a stimulating and provocative article about deception in negotiation. He presents his views, in part, in contrast with our earlier work on the Mutual Trust Perspective. We believe that Strudler is wrong in his account of the ethics of deception in negotiation and in his quick dismissal of the Mutual Trust Perspective. Though his mistakes may be informative, his views are potentially harmful to business practice. In this paper, we present arguments against Strudler’s position and attempt to salvage the Mutual-Trust Perspective from his attack. Strudler’s work reaffirms the need for a more pragmatic approach to …
Ratifiable Mechanisms: Learning From Disagreement, Peter Cramton, Thomas R. Palfrey
Ratifiable Mechanisms: Learning From Disagreement, Peter Cramton, Thomas R. Palfrey
Peter Cramton
In a mechanism design problem, participation constraints require that all types prefer the proposed mechanism to some status quo. If equilibrium play in the status quo mechanism depends on the players’ beliefs, then the inference drawn if someone objects to the proposed mechanism may alter the participation constraints. We investigate this issue by modeling the mechanism design problem as a two-stage process, consisting of a ratification stage followed by the actual play of the chosen game. We develop and illustrate a new concept, ratifiability, that takes account of inferences from a veto in a consistent way.
Wage Bargaining With Time-Varying Threats, Peter Cramton, Joseph Tracy
Wage Bargaining With Time-Varying Threats, Peter Cramton, Joseph Tracy
Peter Cramton
We study wage bargaining in which the union is uncertain about the firm's willingness to pay and threat payoffs vary over time. Strike payoffs change over time as replacement workers are hired, as strikers find temporary jobs, and as inventories or strike funds run out. We find that bargaining outcomes are substantially altered if threat payoffs vary. If dispute costs increase in the long-run, then dispute durations are longer, settlement rates are lower, and wages decline more slowly during the short-run (and may even increase). The settlement wage is largely determined from the long-run threat, rather than the short-run threat.
The Determinants Of U.S. Labor Disputes, Peter Cramton, Joseph Tracy
The Determinants Of U.S. Labor Disputes, Peter Cramton, Joseph Tracy
Peter Cramton
We present a bargaining model of union contract negotiations, in which the union decides between two threats: the union can strike or continue to work under the expired contract. The model makes predictions about the level of dispute activity and the form the disputes take. Strike incidence increases as the strike threat becomes more attractive, because of low unemployment or a real wage drop during the prior contract. We test these predictions by estimating logistic models of dispute incidence and dispute composition for U.S. labor contract negotiations from 1970 to 1989. We find empirical support for the model's key predictions, …
Relational Investing And Agency Theory, Peter Cramton, Ian Ayres
Relational Investing And Agency Theory, Peter Cramton, Ian Ayres
Peter Cramton
This Article analyzes how, and when, corporate governance could be improved by utilizing "relational investing." The term relational investing is just coming into vogue and there does not yet seem to be a consensus on what it means. Although the term has been trumpeted on the cover of Business Week, before the Conference on Relational Investing at Columbia University, relatively little legal writing had been published on the subject. For the purposes of this Article, we define relational investing to encompass commitments to buy and hold significant blocks of a corporation's stock. And it is particularly important that the relational …
Promoting Honesty In Negotiation: An Exercise In Practical Ethics, Peter Cramton, J Gregory Dees
Promoting Honesty In Negotiation: An Exercise In Practical Ethics, Peter Cramton, J Gregory Dees
Peter Cramton
In a competitive and morally imperfect world, business people are often faced with serious ethical challenges. Harboring suspicions about the ethics of others, many feel justified in engaging in less-than-ideal conduct to protect their own interests. The most sophisticated moral arguments are unlikely to counteract this behavior. We believe that this morally defensive behavior is responsible, in large part, for much undesirable deception in negotiation. Drawing on recent work in the literature of negotiations, we present some practical guidance on how negotiators might build trust, establish common interests, and secure credibility for their statements thereby promoting honesty We also point …
Strikes And Holdouts In Wage Bargaining: Theory And Data, Peter Cramton, Joseph Tracy
Strikes And Holdouts In Wage Bargaining: Theory And Data, Peter Cramton, Joseph Tracy
Peter Cramton
We develop a private-information model of union contract negotiations in which disputes signal a firm’s willingness to pay. Previous models have assumed that all labor disputes take the form of a strike. Yet a prominent feature of U.S. collective bargaining is the holdout: negotiations often continue without a strike after the contract has expired. Production continues with workers paid according to the expired contract. We analyze the union’s decision to strike or hold out and highlight its importance to strike activity. Strikes are more likely to occur after a drop in the real wage or a decline in unemployment.
Strategic Delay In Bargaining With Two-Sided Uncertainty, Peter Cramton
Strategic Delay In Bargaining With Two-Sided Uncertainty, Peter Cramton
Peter Cramton
The role of strategic delay is analyzed in an infinite-horizon alternating-offer model of bargaining. A buyer and seller are engaged in the trade of a single object. Both bargainers have private information about their own preferences and are impatient in that delaying agreement is costly. An equilibrium is constructed in which the bargainers signal the strength of their bargaining positions by delaying prior to making an offer. A bargainer expecting large gains from trade is more impatient than one expecting small gains, and hence makes concessions earlier on. Trade occurs whenever gains from trade exist, but due to the private …
Dynamic Bargaining With Transaction Costs, Peter Cramton
Dynamic Bargaining With Transaction Costs, Peter Cramton
Peter Cramton
A buyer and seller alternate making offers until an offer is accepted or someone terminates negotiations. The seller's valuation is common knowledge, but the buyer's valuation is known only by the buyer. Impatience to reach an agreement comes from two sources: the traders discount future payoffs and there are transaction costs of bargaining. Equilibrium behavior involves either immediate trade, delayed trade, or immediate termination, depending on the size of the gains from trade and the relative bargaining costs. This contrasts with the pure discounting model where termination never occurs, and the pure transaction cost model where delayed trade never occurs.
Shrewd Bargaining On The Moral Frontier: Toward A Theory Of Morality In Practice, Peter Cramton, J Gregory Dees
Shrewd Bargaining On The Moral Frontier: Toward A Theory Of Morality In Practice, Peter Cramton, J Gregory Dees
Peter Cramton
From a traditional moral point of view, business practitioners often seem overly concerned about the behavior of their peers in deciding how they ought to act. We propose to account for this concern by introducing a mutual trust perspective, where moral obligations are grounded in a sense of trust that others will abide by the same rules. When grounds for trust are absent, the obligation is weakened. We illustrate this perspective by examining the widespread ambivalence with regard to deception about one’s settlement preferences in negotiation. On an abstract level, such deception generally seems undesirable, though in many individual cases …
Using Auction Theory To Inform Takeover Regulation, Peter Cramton, Alan Schwartz
Using Auction Theory To Inform Takeover Regulation, Peter Cramton, Alan Schwartz
Peter Cramton
This paper focuses on certain mechanisms that govern the sale of corporate assets. Under Delaware law, when a potential acquirer makes a serious bid for a target, the target’s Board of Directors is required to act as would "auctioneers charged with getting the best price for the stock-holders at a sale of the company.’’ The Delaware courts’ preference for auctions follows from two premises. First, a firm’s managers should maximize the value of their shareholders’ investment in the company. Second, auctions maximize shareholder returns. The two premises together imply that a target’s board should conduct an auction when at least …
Cartel Enforcement With Uncertainty About Costs, Peter Cramton, Thomas R. Palfrey
Cartel Enforcement With Uncertainty About Costs, Peter Cramton, Thomas R. Palfrey
Peter Cramton
What cartel agreements are possible when firms have private information about production costs? For private cost uncertainty we characterize the set of cartel agreements that can be supported, recognizing incentive and participation constraints. If defection results in either Cournot or Bertrand competition, the incentive problem in large cartels is severe enough to prevent the cartel from achieving the monopoly outcome. However, if the cartel agreement requires less than unanimous ratification by the member firms, then the incentive problem can be overcome in large cartels. With common cost uncertainty, perfect collusion is possible in large cartels, regardless of the ratification rule.
Nonrandom Mixing Models Of Hiv Transmission, Peter Cramton, Edward H. Kaplan, A. David Paltiel
Nonrandom Mixing Models Of Hiv Transmission, Peter Cramton, Edward H. Kaplan, A. David Paltiel
Peter Cramton
Models of HIV transmission and the AIDS epidemic generally assume random mixing among those infected with HIV and those who are not. For sexually transmitted HIV, this implies that individuals select sex partners without regard to attributes such as familiarity, attractiveness, or risk of infection. This paper formulates a model for examining the impact of nonrandom mixing on HIV transmission. We present threshold conditions that determine when HIV epidemics can occur within the framework of this model. Nonrandom mixing is introduced by assuming that sexually active individuals select sex partners to minimize the risk of infection. In addition to variability …
Dissolving A Partnership Efficiently, Peter Cramton, Robert Gibbons, Paul Klemperer
Dissolving A Partnership Efficiently, Peter Cramton, Robert Gibbons, Paul Klemperer
Peter Cramton
Several partners jointly own an asset that may be traded among them. Each partner has a valuation for the asset; the valuations are known privately and drawn independently from a common probability distribution. We characterize the set of all incentive-compatible and interim-individually-rational trading mechanisms, and give a simple necessary and sufficient condition for such mechanisms to dissolve the partnership ex post efficiently. A bidding game is constructed that achieves such dissolution whenever it is possible. Despite incomplete information about the valuation of the asset, a partnership can be dissolved ex post efficiently provided no single partner owns too large a …
Sequential Bargaining Mechanisms, Peter Cramton
Sequential Bargaining Mechanisms, Peter Cramton
Peter Cramton
The introductory discussion presented in this chapter considers the simplest type of sequential bargaining games in which the players’ time preferences are described by known and fixed discount rates. I begin by characterizing the class of perfect bargaining mechanisms, which satisfy the desirable properties of incentive compatibility (i.e., each player reports his type truthfully), individual rationality (i.e., every potential player wishes to play the game), and sequential rationality (i.e., it is never common knowledge that the mechanism induced over time is dominated by an alternative mechanism). It is shown that ex post efficiency is unobtainable by any incentive-compatible and individually …
Bargaining With Incomplete Information: An Infinite-Horizon Model With Two-Sided Uncertainty, Peter Cramton
Bargaining With Incomplete Information: An Infinite-Horizon Model With Two-Sided Uncertainty, Peter Cramton
Peter Cramton
The resolution of any bargaining conflict depends crucially on the relative urgency of the agents to reach agreement and the information each agent has about the others’ preferences. This paper explores, within the context of an infinite-horizon bargaining model with two-sided uncertainty, how timing and information affect the rational behavior of agents when commitment is not possible. Since the bargainers are uncertain about whether trade is desirable, they must communicate some of their private information before an agreement can be reached. This need for learning, due to incomplete information about preferences, results in bargaining inefficiencies: trade often occurs after costly …