Vickrey Auctions for Irregular Distributions

The classic result of Bulow and Klemperer \cite{BK96} says that in a single-item auction recruiting one more bidder and running the Vickrey auction achieves a higher revenue than the optimal auction's revenue on the original set of bidders, when values are drawn i.i.d. from a regular distribution. We give a version of Bulow and Klemperer's result in settings where bidders' values are drawn from non-i.i.d. irregular distributions. We do this by modeling irregular distributions as some convex combination of regular distributions. The regular distributions that constitute the irregular distribution correspond to different population groups in the bidder population. Drawing a bidder from this collection of population groups is equivalent to drawing from some convex combination of these regular distributions. We show that recruiting one extra bidder from each underlying population group and running the Vickrey auction gives at least half of the optimal auction's revenue on the original set of bidders

Auctions vs. Negotiations

Which is the more profitable way to sell a company: a public auction or an optimally structured negotiation with a smaller number of bidders? We show that under standard assumptions the public auction is always preferable, even if it forfeits all the seller's negotiating power, including the ability to withdraw the object from sale, provided that it attracts at least one extra bidder. An immediate public auction also dominates negotiating while maintaining the right to hold an auction subsequently with more bidders. The results hold for both the standard independent private values model and a common values model. They suggest that the value of negotiating skill is small relative to the value of additional competition.

Procurement of Goods and Services – Scope and Government

In modern economies firms are part of an extensive network of division of labor embedded in markets. Rather than producing everything “in house, ” the modern firm buys most inputs from the best available source outside. Similarly, firms ’ outputs are continuously specialized and redefined to make them fit into the larger scheme o

Lorenzo Market between Diversity and Mutation

The aim of this paper is to investigate the relationship between the diversity of groups of workers and the local division of labour in the San Lorenzo Market, Florence, Italy. This empirical research may help distinguish the demographic, migratory and occupational patterns of the workers in accordance with their national origin. It shows that geographical origin is the key to the differences, specialisations and oppositions between the Florentines and the various groups of migrants on the one hand, and between these immigrant groups on the other hand. It shows too the mutation made by the conflict between global dynamics and a local labour market.San Lorenzo Market, Immigrant workers, Diversity, Local division of labour, Migratory trajectories

Country Risk Ratings of Small Island Tourism Economies

Over the last twenty years, there has been a growing fascination within public and academic circles about the livelihood of islands with small populations and territory which are present in each of the world’s great oceans. The Small Island Tourism Economies analysed in this paper vary profoundly in their size, land area, and location. Moreover, they have depended heavily on financial aid from their former colonists for infrastructure development, which has declined dramatically since the collapse of Communism. These economies also differ in their narrow natural resource bases on land and in water, in their prospects for self reliance in economic development, and their overwhelming reliance on tourism as a source of exports. These economies are developing countries which need a consistent inflow of foreign direct investment to maintain economic growth. Such sovereign island economies differ in the extent to which they are home to a multitude of ethnic diversity, political systems, historical experience, economic and environmental vulnerability, ecological fragility, the types of risks facing private investors, and in the extent to which they are perceived as, or perceive themselves to be, insular and peripheral. In spite of the vast diversity as well as similarities, researchers are fascinated by the world of small island economies, and are intrigued by their unique features which cannot be addressed through a generalised set of rules. This paper analyses the geographical, historical, economic, tourism-oriented and institutional characteristics, as well as vulnerability to changes in the international economic, financial and political climates, of twenty Small Island Tourism Economies. The snapshot images provide a comparative assessment of the international country risk ratings, and highlight the importance of economic, financial and political risk ratings as components of a composite risk rating for Small Island Tourism Economies.Small size, Tourism, Volatility, Vulnerability, Country risk ratings, Economic risk, Financial risk, Political risk, Composite risk

Governing Migration: Immigrant Groups' Strategies in Three Italian Cities - Rome, Naples and Bari

Ethnic networks constitute an important component of immigrants’ integration in their host societies. This has been a particularly important strategy in Italy, where institutional assistance for immigrants is often paltry and problematic. This paper examines three ethnic communities in Italy that have been particularly successful in using their ethnic social capital for integrating into Italian society at the city level: the Mauritians in Bari, Filipinos in Rome and Chinese in Naples. Sending countries’ policies and programs, as well as the socio-historical context of ethnic relations within the countries has also influenced the patterns of these networks. The psychological or motivational element behind these groups’ migration project is also critical to their integration, and is often manifested on a group level. Keywords: Migration, Immigrant, Ethnic group

Is the Discount Rate Relevant in Explaining the Environmental Kuznets Curve?

In this paper we use Pindyck’s model (2002) to show that the discount rate may play an important role in explaining for the income-pollution pattern observed in the real world. Low levels of income involve high values of discount rate, that are obstacles to the adoption of a pollution abatement policy. Only when the discount rate falls, as a consequence of growth, will it be possible to implement measures for emissions reduction. Thus we are able to derive an inverse U-shaped income-pollution pattern, making use of an argument that has never yet been introduced in the economic debate on this issue.Discount rate, Environmental Kuznets Curve, Income, Stock pollutants

Envy Freedom and Prior-free Mechanism Design

We consider the provision of an abstract service to single-dimensional agents. Our model includes position auctions, single-minded combinatorial auctions, and constrained matching markets. When the agents' values are drawn from a distribution, the Bayesian optimal mechanism is given by Myerson (1981) as a virtual-surplus optimizer. We develop a framework for prior-free mechanism design and analysis. A good mechanism in our framework approximates the optimal mechanism for the distribution if there is a distribution; moreover, when there is no distribution this mechanism still performs well. We define and characterize optimal envy-free outcomes in symmetric single-dimensional environments. Our characterization mirrors Myerson's theory. Furthermore, unlike in mechanism design where there is no point-wise optimal mechanism, there is always a point-wise optimal envy-free outcome. Envy-free outcomes and incentive-compatible mechanisms are similar in structure and performance. We therefore use the optimal envy-free revenue as a benchmark for measuring the performance of a prior-free mechanism. A good mechanism is one that approximates the envy free benchmark on any profile of agent values. We show that good mechanisms exist, and in particular, a natural generalization of the random sampling auction of Goldberg et al. (2001) is a constant approximation

Cultural Rights and Civic Virtue

This paper addresses the potential tension between two broadly stated policy objectives: the preservation of distinctive cultural traditions, often through the mechanism of formal legal rights, and the fostering of civic virtue, a sense of local community and the advancement of common civic enterprises. Many political liberals argued that liberal societies have an obligation to accommodate the cultural traditions of various sub groups through legal rights and a redistribution of social resources. The “right to cultural difference” is now widely (if not universally) understood to be a basic human right, on par with rights to religious liberty and racial equality. Other theorists writing in the liberal, civic republican, and urban sociology traditions expounded on the necessity of civic virtue, community and common enterprises initiated and executed at the local or municipal level of government or private association. These theorists argued that common projects, shared norms and social trust are indispensable elements of effective democratic government and are necessary to the altruism and public spiritedness that in turn secure social justice. These two policy goals therefore may at times be in conflict. This conflict is especially severe in larger culturally diverse cities, where social trust and civic virtue are most needed and often in shortest supply. Policies designed to counter cosmopolitan alienation and anomie by fostering civic virtue, social trust and common social norms will inevitably conflict with the cultural traditions and sub group identification of some minority groups. The paper argues that such conflicts are often best confronted on the field of political debate and policy analysis, not in the language of civil rights. Rights discourse, with its inherent absolutism, is ill suited to the type of subtle tradeoffs that these conflicts often entail.Law, Rights, Multiculturalism