Empirical Models of Auctions

Many important economic questions arising in auctions can be answered only with knowledge of the underlying primitive distributions governing bidder demand and information. An active literature has developed aiming to estimate these primitives by exploiting restrictions from economic theory as part of the econometric model used to interpret auction data. We review some highlights of this recent literature, focusing on identification and empirical applications. We describe three insights that underlie much of the recent methodological progress in this area and discuss some of the ways these insights have been extended to richer models allowing more convincing empirical applications. We discuss several recent empirical studies using these methods to address a range of important economic questions.Auctions, Identification, Estimation, Testing

Self-Serving Dictators and Economic Growth

A new line of theoretical and empirical literature emphasizes the pivotal role of fair institutions for growth.We present a model, a laboratory experiment, and a simple cross-country regression supporting this view.We model an economy with an unequal distribution of property rights, in which individuals can free-ride or cooperate.Experimentally we observe a dramatic drop in cooperation (and growth), when inequality is increased by a selfserving dictator.No such effect is observed when the inequality is increased by a fair procedure.Our regression analysis provides basic macroeconomic support for the adverse growth effect of the interaction between the degree and the genesis of inequality.We conclude that economies giving equal opportunities to all are not likely to suffer retarded growth due to inequality in the way economies with self-serving dictators will.economic growth;inequality;corruption;public goods

Self-Serving Dictators and Economic Growth

A new line of theoretical and empirical literature emphasizes the pivotal role of fair institutions for growth. We present a model, a laboratory experiment, and a simple cross-country regression supporting this view. We model an economy with an unequal distribution of property rights, in which individuals can free-ride or cooperate. Experimentally we observe a dramatic drop in cooperation (and growth), when inequality is increased by a selfserving dictator. No such effect is observed when the inequality is increased by a fair procedure. Our regression analysis provides basic macroeconomic support for the adverse growth effect of the interaction between the degree and the genesis of inequality. We conclude that economies giving equal opportunities to all are not likely to suffer retarded growth due to inequality in the way economies with self-serving dictators will.inequality, corruption, weak institutions, growth, intentions, dynamic public goods

On the Empirical Content of Quantal Response Equilibrium

The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experimental subjects. However, even with strong a priori restrictions on unobservables, QRE imposes no falsifiable restrictions: it can rationalize any distribution of behavior in any normal form game. After demonstrating this, we discuss several approaches to testing QRE under additional maintained assumptions.quantal response equilibrium, falsifiability, testable restrictions, regular quantal response equilibrium, rank-cumulative probabilities, Block-Marschak polynomials

Classification of Parameter-Dependent Quantum Integrable Models, Their Parameterization, Exact Solution, and Other Properties

We study general quantum integrable Hamiltonians linear in a coupling constant and represented by finite NxN real symmetric matrices. The restriction on the coupling dependence leads to a natural notion of nontrivial integrals of motion and classification of integrable families into Types according to the number of such integrals. A Type M family in our definition is formed by N-M nontrivial mutually commuting operators linear in the coupling. Working from this definition alone, we parameterize Type M operators, i.e. resolve the commutation relations, and obtain an exact solution for their eigenvalues and eigenvectors. We show that our parameterization covers all Type 1, 2, and 3 integrable models and discuss the extent to which it is complete for other types. We also present robust numerical observation on the number of energy level crossings in Type M integrable systems and analyze the taxonomy of types in the 1d Hubbard model.Comment: 41 pages, 4 figures, 1 tabl

On the Empirical Content of Quantal Response Equilibrium

The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experimental subjects. However, even with strong a priori restrictions on unobservables, QRE imposes no falsifiable restrictions: it can rationalize any distribution of behavior in any normal form game. After demonstrating this, we discuss several approaches to testing QRE under additional maintained assumptions.Quantal response equilibrium, Falsifiability, Testable restrictions, Regular quantal response equilibrium, Rank-cumulative probabilities, Block-Marschak polynomials

Workplace disability diversity and job-related well-being in Britain: a WERS2004 based analysis

This paper attempts to establish empirically whether there is a link between workplace disability and employee job-related well-being. Using nationally representative linked employer-employee data for Britain, I employ alternative econometric techniques to account for unobserved workplace heterogeneity. I find that workplace disability diversity is associated with lower employee well-being among people with no reported disability. Tests conducted also indicate that workplace equality policies do not ameliorate this effect

Empirical Models of Auctions

Many important economic questions arising in auctions can be answered only with knowledge of the underlying primitive distributions governing bidder demand and information. An active literature has developed aiming to estimate these primitives by exploiting restrictions from economic theory as part of the econometric model used to interpret auction data. We review some highlights of this recent literature, focusing on identification and empirical applications. We describe three insights that underlie much of the recent methodological progress in this area and discuss some of the ways these insights have been extended to richer models allowing more convincing empirical applications. We discuss several recent empirical studies using these methods to address a range of important economic questions.