Bidding Rings in Repeated Auctions.

This paper considers the question of tacit collusion in repeated auctions with independent private values. McAfee and McMillan show that the extent of collusion is limited by the availability of transfers. If no transfers are possible, the private information of bidders precludes any collusive scheme beyond bid rotation (BRS), even when the cartel has unlimited enforcement.AUCTIONS ; UNCERTAINTY ; BIDDING

Unobservable Persistant Productivity and Long Term Contracts

We study the problem of a firm that faces asymmetric information about the productivity of its potential workers. In our framework, a worker’s productivity is either assigned by nature at birth, or determined by an unobservable initial action of the worker that has persistent effects over time. We provide a characterization of the optimal dynamic compensation scheme that attracts only high productivity workers: consumption –regardless of time period– is ranked according to likelihood ratios of output histories, and the inverse of the marginal utility of consumption satisfies the martingale property derived in Rogerson (1985). However, in the case of i.i.d. output and square root utility we show that, contrary to the features of the optimal contract for a repeated moral hazard problem, the level and the variance of consumption are negatively correlated, due to the influence of early luck into future compensation. Moreover, in this example long-term inequality is lower under persistent private informationMechanism design, Moral hazard, Persistence

From population growth to firm demographics: implications for concentration, entrepreneurship and the labor share

This is the final version. Available from The Econometric Society via the DOI in this record. In the U.S., large firms now account for a greater share of economic activity, new firms are being created at slower rates, and workers are receiving a smaller share of GDP. Changes in population growth provide a unified quantitative explanation. A decrease in population growth lowers firm entry rates, shifting the firm-age distribution toward older firms. Firm aging accounts for (i) the concentration of employment in large firms, (ii) and trends in average firm size and exit rates, key determinants of firm entry rates. Feedback effects from firm demographics generate two-thirds of the effect. Prior to the decrease, entry rates rose steadily reflecting the earlier baby boom. The glut of firms due to the baby boom lead to rich transitional dynamics within the feedback effects, accounting for more than half the total change. Baby boom induced changes in the firm-age distribution provide a driving force for the post-WWII rise and fall in the aggregate labor share. Ignoring changes in population growth attributes all the long run decline in entry rates to a decrease in firm exit rates, which in reality have been only one-third as large.National Science Foundatio

Arsenic methylation patterns before and after changing from high to lower concentrations of arsenic in drinking water.

Inorganic arsenic (In-As), an occupational and environmental human carcinogen, undergoes biomethylation to monomethylarsonate (MMA) and dimethylarsinate (DMA). It has been proposed that saturation of methylation capacity at high exposure levels may lead to a threshold for the carcinogenicity of In-As. The relative distribution of urinary In-As, MMA, and DMA is used as a measure of human methylation capacity. The most common pathway for elevated environmental exposure to In-As worldwide is through drinking water. We conducted a biomarker study in northern Chile of a population chronically exposed to water naturally contaminated with high arsenic content (600 micrograms/l). In this paper we present the results of a prospective follow-up of 73 exposed individuals, who were provided with water of lower arsenic content (45 micrograms/l) for 2 months. The proportions of In-As, MMA, and DMA in urine were compared before and after intervention, and the effect of other factors on the distribution of arsenic metabolites was also analyzed. The findings of this study indicate that the decrease in arsenic exposure was associated with a small decrease in the percent In-As in urine (from 17.8% to 14.6%) and in the MMA/DMA ratio (from 0.23 to 0.18). Other factors such as smoking, gender, age, years of residence, and ethnicity were associated mainly with changes in the MMA/DMA ratio, with smoking having the strongest effect. Nevertheless, the factors investigated accounted for only about 20% of the large interindividual variability observed. Genetic polymorphisms in As-methylating enzymes and other co-factors are likely to contribute to some of the unexplained variation. The changes observed in the percent In-As and in the MMA/DMA ratio do not support an exposure-based threshold for arsenic methylation in humans

Chronic arsenic exposure and risk of infant mortality in two areas of Chile.

Chronic arsenic exposure has been associated with a range of neurologic, vascular, dermatologic, and carcinogenic effects. However, limited research has been directed at the association of arsenic exposure and human reproductive health outcomes. The principal aim of this study was to investigate the trends in infant mortality between two geographic locations in Chile: Antofagasta, which has a well-documented history of arsenic exposure from naturally contaminated water, and Valparaíso, a comparable low-exposure city. The arsenic concentration in Antofagasta's public drinking water supply rose substantially in 1958 with the introduction of a new water source, and remained elevated until 1970. We used a retrospective study design to examine time and location patterns in infant mortality between 1950 and 1996, using univariate statistics, graphical techniques, and Poisson regression analysis. Results of the study document the general declines in late fetal and infant mortality over the study period in both locations. The data also indicate an elevation of the late fetal, neonatal, and postneonatal mortality rates for Antofagasta, relative to Valparaíso, for specific time periods, which generally coincide with the period of highest arsenic concentration in the drinking water of Antofagasta. Poisson regression analysis yielded an elevated and significant association between arsenic exposure and late fetal mortality [rate ratio (RR) = 1.7; 95% confidence interval (CI), 1.5-1.9], neonatal mortality (RR = 1.53; CI, 1.4-1.7), and postneonatal mortality (RR = 1.26; CI, 1.2-1.3) after adjustment for location and calendar time. The findings from this investigation may support a role for arsenic exposure in increasing the risk of late fetal and infant mortality

Methylation study of a population environmentally exposed to arsenic in drinking water.

Methylation is considered the detoxification pathway for inorganic arsenic (InAs), an established human carcinogen. Urinary speciation analysis is used to assess the distribution of metabolites [monomethylarsonate (MMA), dimethylarsinate (DMA), and unmethylated arsenic (InAs)], as indicators of methylation capacity. We conducted a large biomarker study in northern Chile of a population chronically exposed to high levels of arsenic in drinking water. We report the results of the methylation study, which focused on the effects of exposure and other variables on the percent InAs, MMA, DMA, and the ratio of MMA to DMA in urine. The study consisted of 122 people in a town with arsenic water levels around 600 micrograms/l and 98 participants in a neighboring town with arsenic levels in water of about 15 micrograms/l. The corresponding mean urinary arsenic levels were 580 micrograms/l and 60 micrograms/l, of which 18.4% and 14.9% were InAs, respectively. The main differences were found for MMA:DMA; exposure, smoking, and being male were associated with higher MMA:DMA, while longer residence, Atacameño ethnicity, and being female were associated with lower MMA:DMA. Together, these variables explained about 30% of the variability in MMA:DMA. Overall, there was no evidence of a threshold for methylation capacity, even at very high exposures, and the interindividual differences were within a much wider range than those attributed to the variables investigated. The differences in percent InAs were small and within the ranges of other studies of background exposure levels. The biological significance of MMA:DMA, which was more than 1.5 times greater in the exposed group, and its relationship to sex, length of exposure, and ethnicity need further investigation because its relevance to health risk is not clear

Occupational choice, number of entrepreneurs and output: theory and empirical evidence with Spanish data

This paper extends the (Lucas, Bell J Econ 9:508–523,1978) model of occupational choices by individuals with different skills, beyond the simple options of self-employment or wage-employment, by including a second choice for the self-employed. That is, an option to hire employees and so become self-employed with employees (SEWEs), or to be self-employed without employees (SEWNEs). We solve for the market equilibrium and examine the sensitivity of relative sizes of occupational groups, and of the level of productivity, to changes in the exogenous parameters. The results show that the positive (negative) association between number of SEWEs (SEWNEs) and productivity, observed in the Spanish data, can be explained, under certain conditions, as the result of cross-region and time differences in average skills. These findings point to the importance of distinguishing between SEWEs and SEWNEs in drawing valid conclusions concerning any link between entrepreneurship and economic development