We study the e ect of cheap talk between bidders on the outcome of a rst-price procurement game with N sellers in which bidding is costly. Although no side-payements or commitments are allowed, we show that the game admits a unique family of symmetric equilibria in which sellers use communication to collude on a subset of participants and/or to reveal information about their valuation. Contrary...

Despite standard economic models that assume stability of preferences, empirical work on insurance choice has documented a surprising lack of stability of risk preferences across domains. We hypothesize that informational differences can partly explain the observed empirical regularities, and test our hypothesis by conducting lab and field experiments with over 4,000 participants. We exogenousl...

Abstrucr; We address the problem of sample size determination for step-down multiple comparison procedures (MCP’s) for two nonhierarchical families orthogonal contrasts and comparisons with a control, in order to guarantee a specified requirement on their power. The results for the corresponding single-step MCP’s are obtained as special cases. Numerical calculations of the sample sizes to guara...

Nishimizu and Hulten (1978) developed a model for measuring productivity growth when intermediate inputs are explicitly recognized. they show "...that the aggregate rate of productivity change is the weighted sum of the sectoral rates" (p. 353). To derive this result, the authors assume that the inputs are "...allocated efficiently among sectors" (p. 352). The weights used to sum the sectoral r...

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We consider market rules for transferring IP addresses, numeric identifiers required by all computers connected to the Internet. Transfers usefully move resources from lowest to highest-valuation networks, but transfers tend to cause socially costly growth in the Internet’s routing table. We propose a market rule that avoids excessive trading and comes close to achieving social efficiency. We a...

We derive optimal strategies for a bidding agent that participates in multiple, simultaneous second-price auctions with perfect substitutes. We prove that, if everyone else bids locally in a single auction, the global bidder should always place non-zero bids in all available auctions, provided there are no budget constraints. With a budget, however, the optimal strategy is to bid locally if thi...

In this paper we introduce a new option pricing mechanism for reducing the exposure problem encountered by bidding agents with complementary valuations when participating in sequential, second-price auction markets. Existing option pricing models have two main drawbacks: they either apply fixed exercise prices, which may deter bidders with low valuations, thereby decreasing allocative efficienc...

This paper extends the analysis of the relationship between health and schooling by examining the impact of education on the choice of medical care inputs and the subsequent relationship between these inputs and overall health. In particular, we examine the productive effects of education on health as well as the allocative effects of education on the consumption of curative and preventive medi...

A “higher-order” liability regime—in which a plaintiff and a defendant have a sequence of alternating options to take (or to put) a disputed entitlement —can enhance allocative efficiency by harnessing the private information possessed by both litigants. Indeed, infinite order liability regimes can, as a theoretical matter, assure first-best efficiency. Such iterated taking regimes have, howeve...