A dynamic mechanism and surplus extraction under ambiguity

We study the question of auction design in an IPV setting characterized by ambiguity. We assume that the preferences of agents exhibit ambiguity aversion; in particular, they are represented by the epsilon-contamination model. We show that a simple variation of a discrete Dutch auction can extract almost all surplus. This contrasts with optimal auctions under IPV without ambiguity as well as with optimal static auctions with ambiguity—in all of these, types other than the lowest participating type obtain a positive surplus. An important point of departure is that the modified Dutch mechanism is dynamic rather than static, establishing that under ambiguity aversion—even when the setting is IPV in all other respects—a dynamic mechanism can have additional bite over its static counterparts. A further general insight is that the standard revelation principle does not automatically extend to environments not characterized by subjective expected utility

A Dynamic Mechanism and Surplus Extraction Under Ambiguity

In the standard independent private values (IPV)model, each bidder’s beliefs about the values of any other bidder is represented by a unique prior. In this paper we relax this assumption and study the question of auction design in an IPV setting characterized by ambiguity: bidders have an imprecise knowledge of the distribution of values of others, and are faced with a set of priors. We also assume that their preferences exhibit ambiguity aversion; in particular, they are represented by the epsilon-contamination model. We show that a simple variation of a discrete Dutch auction can extract almost all surplus. This contrasts with optimal auctions under IPV without ambiguity as well as with optimal static auctions with ambiguity - in all of these, types other than the lowest participating type obtain a positive surplus. An important point of departure is that the modified Dutch mechanism we consider is dynamic rather than static, establishing that under ambiguity aversion – even when the setting is IPV in all other respects – a dynamic mechanism can have additional bite over its static counterparts.Ambiguity Aversion; Epsilon Contamination; Modified Dutch Auction; Dynamic Mechanism; Surplus Extraction

Mechanism Design With Ambiguous Communication Devices

This paper considers mechanism design problems in environments with ambiguity-sensitive individuals. The novel idea is to introduce ambiguity in mechanisms so as to exploit the ambiguity sensitivity of individuals. Deliberate engineering of ambiguity, through ambiguous mediated communication, can allow (partial) implementation of social choice functions that are not incentive compatible with respect to prior beliefs. We provide a complete characterization of social choice functions partially implementable by ambiguous mechanisms

Information in Mechanism Design

We survey the recent literature on the role of information for mechanism design. We specifically consider the role of endogeneity of and robustness to private information in mechanism design. We view information acquisition of and robustness to private information as two distinct but related aspects of information management important in many design settings. We review the existing literature and point out directions for additional future work.Mechanism Design, Information Acquisition, Ex Post Equilibrium, Robust Mechanism Design, Interdependent Values, Information Management

An economic analysis of woodfuel management in the Sahel : the case of Chad

The woodlands in some parts of the Sahel are effectively an open-access resource. Under open access, fuelwood cutters have no incentive to allow for benefits that might accrue if the wooded area were managed rather than mined. Those benefits include sustainable streams of fuelwood, fruits, and other tree products, browse for cattle, and ecological services such as nitrogen fixation and erosion prevention. To remedy this problem, some Sahelian areas have moved to give communities effective control of local woodland resources. To make it easier to analyze the economic cost of such supply-side interventions, the authors present an economic framework and computational method for assessing policy impacts on the cost of woodfuel supplies, and the spatial distribution of biomass, in a particular Sahelian woodland setting. They use spatial data on standing stock and on the costs of transport to market to model a supply curve of fuel to a fuel-consuming location. given an exogenously specified demand, the model simulates, period by period, the extraction, regeneration, and transport of wood fuels. It also permits easy calculation of the dynamic cost of woodfuel depletion. They apply the model to evaluate the benefits and ecological impacts of various scenarios for woodland management around the city of N'Djamena in Chad.Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies,Labor Policies,Agricultural Knowledge&Information Systems,Economic Theory&Research,Environmental Economics&Policies,Access to Markets,Markets and Market Access,Geographical Information Systems

From Rites to Rights: the Co-evolution of Political, Economic and Social Structures

It is the charge of economic history not only to explain the economic past, but to use it to enrich and develop economic theory (North, 1994). In paleoeconomics, theory plays the additional role of adding veracity of accounts based on sparse evidence through the demonstration of internal consistency. We synthesize pre-historical and historical evidence available from the settlement and modernization of the Hawaiian economy into a stylized picture of the co-evolution of production and governance structures called the governmental Kuznets curve. We explain the co-evolution with a theory of institutional change that includes the roles of resource scarcity and opportunities for internal and external economies of scale in the increasing intensification and specialization of production. These are facilitated first by a steeper and then by a flatter political organization.Paleoeconomics, governance, institutional change, Hawaiian economy, intensification, specialization

From Formal Subsumption to General Intellect: Elements for a Marxist Reading of the Thesis of Cognitive Capitalism, in Historical Materialism

Since the crisis of Fordism, capitalism has been characterised by the ever more central role ofknowledge and the rise of the cognitive dimensions of labour. This is not to say that the centralityof knowledge to capitalism is new per se. Rather, the question we must ask is to what extent we canspeak of a new role for knowledge and, more importantly, its relationship with transformations inthe capital/labour relation. From this perspective, the paper highlights the continuing validity ofMarx's analysis of the knowledge/power relation in the development of the division of labour. Moreprecisely, we are concerned with the theoretical and heuristic value of the concepts of formalsubsumption, real subsumption and general intellect for any interpretation of the present change ofthe capital/labour relation in cognitive capitalism. In this way, we show the originality of the generalintellect hypothesis as a sublation of real subsumption. Finally, the article summarises keycontradictions and new forms of antagonism in cognitive capitalism.crisis; division of labour; knowledge; formal subsumption; real subsumption; general intellect; cognitive capitalism; diffuse intellectuality

Capitalist Bulimia: Lacan on Marx and crisis

When, in the late 1960s and early 1970s, Jacques Lacan confronted Marx’s critique of the political economy, he went to the heart of its most crucial notion: surplus-value. In developing his psychoanalytic approach, he claimed that Marx’s surplus-value occupies the position of the symptom/sinthome as a kernel of non quantifiable enjoyment (jouissance) that defies valorisation. This paper offers an interpretation Lacan’s discourse theory, highlighting its socially critical character as it appears, particularly, in the Capitalist discourse (the fifth discourse that subverts the structure of the previous four). It then focuses on Lacan’s approach to Marx’s understanding of surplus-value, arguing that by reading surplus-value as symptom, Lacan gets to the heart of the enigma of the capitalist mode of production as unveiled by Marx. Finally, the paper examines the relevance that Lacan’s reading of Marx might have for the understanding of the crisis of contemporary capitalism and its substantial deadlock

Essays on Bidding Behavior in Auctions

The following thesis presents the results of three experimental studies that investigate how changes in the auction environment or auction rules affect bidding behavior and the auction outcome in a variety of auctions. The first study is concerned with the impact of ambiguity about one’s competitiveness. In particular, bidders are either informed or not informed about the upper limit of the support of a uniform distribution from which their competitors’ bids are drawn. Their relative bid is found to decrease under ambiguity – an effect, which is not predicted by standard ambiguity theories alone. A combination of smooth ambiguity and nonlinear probability weighting is shown to organize the experimental results. The second study investigates how two forms of favoritism affect the auction outcome. In one of the treatments, an ex ante preferred bidder is given the right of first refusal. In the other treatment, the seller elicits the preferred bidder’s valuation with an incentive compatible transfer. The good is then sold to the non-preferred bidder(s) via an auction with a reserve price that optimizes the expected joint payoff of the seller and the preferred bidder. The formal analysis for risk-neutral bidders is based to a great extend on Burguet and Perry (2009). Observed behavior partly deviates from the theoretical predictions. In particular, the auction with an optimal reserve price does not maximize the joint payoff of the seller and the preferred bidder. Most of the deviations can be explained by accounting for risk aversion. The third study is concerned with multi-unit uniform-price auctions in the context of emission trading. It investigates the impact of auction frequency on the ability of the secondary market to achieve cost-efficient emission reduction. In the experiment, frequent auctioning does not increase the allocative efficiency (due to better information in later trading periods) but leads to higher price variability and thus higher total abatement costs