The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.conservation auctions, Conservation Reserve Program, CRP, bid caps, experimental economics

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result.conservation auctions, Conservation Reserve Program, CRP, bid caps, experimental economics, Institutional and Behavioral Economics, Land Economics/Use,

Computational and Experimental Market Design

This dissertation contributes to the literature on the market design of auctions. I use computational and experimental techniques to make two types of contributions to the literature. First, I provide a program that implements a state-of-the-art algorithm for solving multi-unit auctions with asymmetric bidders. This methodological contribution can be used by other economists to solve a variety of auction problems not considered in this dissertation. Second, I undertake the study of one auction environment in particular, utilizing my program to generate hypotheses when bidders participate in a particular sealed-bid, asymmetric multi-unit auction. These hypotheses are then tested in an experimental setting

A Model of West African Millet Prices in Rural Markets

In this article we specify a model of millet prices in the three West African countries of Burkina Faso, Mali, and Niger. Using data obtained from USAID’s Famine Early Warning Systems Network (FEWS NET) we present a unique regional cereal price forecasting model that takes advantage of the panel nature of our data, and accounts for the flow of millet across markets. Another novel aspect of our analysis is our use of the Normalized Difference Vegetation Index (NDVI) to detect and control for variation in conditions for productivity. The average absolute out-of-sample prediction error for 4-month-ahead millet prices is about 20 %.Millet, cereal, West Africa, price forecasting, remote sensing, NDVI, regional panel data

The Farm Act's Regional Equity Provision: Impacts on Conservation Program Outcomes

The 2002 and 2008 Farm Acts increased funding for conservation programs that provide financial assistance to farmers to implement conservation practices on working farmland. Along with seeking cost-effective environmental benefits, these programs have a goal of spreading conservation funding equitably across States. The 2002 and 2008 Farm Acts strengthened this allocative goal by setting a minimum threshold for conservation funding for each State—one that exceeds historical funding for some States—for enrolling agricultural producers in specified conservation programs. This study uses conservation program data to examine evidence of the impacts of the Regional Equity provision of the 2002 Farm Act, and explores the tradeoffs that can occur among conservation program goals when legislation gives primacy to fund allocation. The study found that cross-State shifts in funding reduced the acres receiving conservation treatment for many resource problems, but increased the net economic benefits from treatments on some of them. Overall impacts on the types of producers enrolled were small.Conservation program outcomes, working-land, land protection programs, state funding levels, regional equity provision, cost & benefits, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,

Markets, Climate Change and Food Security in West Africa

West Africa is one of the most food insecure regions of the world. Sharply increased food and energy prices in 2008 brought the role of markets in food access and availability around the world into the spotlight, particularly in urban areas. The period of high prices had the immediate consequence of sharply increasing the number of hungry people in the region without boosting farmer incomes significantly. In this article, the interaction between markets, food prices, agricultural technology and development is explored in the context of West Africa. To improve food security in West Africa, sustained commitment to investment in the agriculture sector will be needed to provide some protection against global swings in both production and world markets. Climate change mitigation programs are likely to force global energy and commodity price increases in the coming decades, putting pressure on regions like West Africa to produce more food locally to ensure stability in food security for the most vulnerable

Common-Value Auctions with Liquidity Needs: An Experimental Test of a Troubled Assets Reverse Auction

We experimentally test alternative auction designs suitable for pricing and removing troubled assets from banks’ balance sheets as part of the financial rescue. Many individual securities or pools of securities are auctioned simultaneously. Securities that are widely held are purchased in auctions for individual securities. Securities with concentrated ownership are purchased as pools of related securities. Each bank has private information about its liquidity need and the true common value of each security. We study bidding behavior and performance of sealed-bid uniform-price auctions and dynamic clock auctions. The clock and sealed-bid auctions resulted in similar prices. However, the clock auctions resulted in substantially higher bank payoffs, since the dynamic auction enabled the banks to better manage their liquidity needs. The clock auctions also reduced bidder error. The experiments demonstrated the feasibility of quickly implementing simple and effective auction designs to help resolve the crisis.Auctions, financial auctions, financial crisis

Intentions to Use Information Technologies: An Integrative Model

An integrative model explaining intentions to use an information technology is proposed. The primary objective is to obtain a clearer picture of how intentions are formed, and draws on previous research such as the technology acceptance model (Davis, Bagozzi, & Warshaw, 1989) and the decomposed theory of planned behavior (Taylor & Todd, 1995a). The conceptual model was tested using questionnaire responses from 189 subjects, measured at two time periods approximately two months apart. The results generally supported the hypothesized relationships, and revealed strong influences of both personal innovativeness and computer self-efficacy

The Effective Use of Limited Information: Do Bid Maximums Reduce Procurement Cost in Asymmetric Auctions?

Conservation programs faced with limited budgets often use a competitive enrollment mechanism. Goals of enrollment might include minimizing program expenditures, encouraging broad participation, and inducing adoption of enhanced environmental practices. We use experimental methods to evaluate an auction mechanism that incorporates bid maximums and quality adjustments. We examine this mechanism’s performance characteristics when opportunity costs are heterogeneous across potential participants, and when costs are only approximately known by the purchaser. We find that overly stringent maximums can increase overall expenditures, and that when quality of offers is important, substantial increases in offer maximums can yield a better quality-adjusted result