Given a scarcity of journal space, what is the optimal rule for whether an empirical finding should be published? Suppose publications inform public about policy-relevant state. Then journals publish extreme results, meaning ones that move beliefs sufficiently. This may take form one- or two-sided test comparing point estimate to prior mean, with critical values determined by cost-benefit analy...

This paper applies the concept of damage coefficients introduced in Houba and Kremers (2008) to provide an estimate of the cost of climate change in particular the cost of changes in mean regional temperature and precipitation to the fruit vegetation sector. We concentrate on the production of apples in the German ‘Alte Land’ region. The estimated cost of climate change on apple-growing in the ...

In an exchange economy under uncertainty populated by multiple consumers, we how the heterogeneity in the individual consumers’ subjective beliefs affect the representative consumer’s utility function. We derive a formula that indicates that the more heterogeneous the individual consumers’ beliefs are, the higher probabilities the representative consumer’s belief attaches to extreme events that...

This paper studies equilibria of second price auctions when valuations and participation costs are both private information with general distribution functions. We consider the existence and uniqueness of equilibrium in this general framework of two-dimensional types. It is shown that there always exists an equilibrium, and further there exists a unique symmetric equilibrium when all bidders ar...

A random assignment is ordinally efficient if it is not stochastically dominated with respect to individual preferences over sure objects. Ordinal efficiency implies (is implied by) ex post (ex ante) efficiency. A simple algorithm characterizes ordinally efficient assignments: our solution, probabilistic serial (PS), is a central element within their set. Random priority (RP) orders agents from...

Wecharacterize the familyofnon-contestablebudget-monotone rules for the allocation of objects and money as those obtained by maximizing a min social welfare function among all non-contestable allocations. We provide three additional seemingly independent approaches to construct these rules. We present three applications of this characterization. First, we show that one can “rectify” any non-con...

In a laboratory experiment with salient rewards, subjects were endowed with money and waiting time. Preferences for waiting time were elicited both as a private good by means of a series of second price auctions, i.e., in a non-induced values framework, and as a public good in the scope of a voluntary contribution game. Our data supports the Lindahl equilibrium as a descriptive model of behavio...

In an exchange economy under uncertainty with two periods, one physical good, and finitely many states of the world, we show that for every (complete or incomplete) market span there exists a sequence of securities such that if they are introduced into markets one by one, the prices of any security is not affected by the subsequent introduction of newer securities and they together generate the...

We consider the climate-policy implications of non-constant time preferences when there is no commitment to future policies. The conceptual and quantitative results follow from the observation that, with time-declining discounting, the unusual delays and persistence of climate impacts provide a commitment device for climate policy-makers, overturning a fundamental climate-policy conclusion from...

This paper analyzes the effects of additional information in a life insurance market under adverse selection. Individuals have an incentive to acquire information about their risk type if their informational status cannot be observed by insurers. In aggregate, however, the existence of a testing opportunity has an effect on the equilibrium premium. We describe the conditions under which, from a...