All-Pay Auctions with Handicaps

An all-pay auction in which the winner is determined according to the sum of the bid and the handicap, the latter of which is endowed to the players, is analyzed. The bidding strategy in an equilibrium is explicitly derived as a "piecewise affine transformation" of the equilibrium strategy in the all-pay auction without handicaps. Allocation rule implemented in the equilibrium and revenue comparison are also discussed.

Measuring the Dynamic Cost of Living Index from Consumption Data

In the U.S., the objective of consumer price index (CPI) measurement is to measure the cost of living. However, the current CPI or, in other words, cost of living index (COLI) measures the cost of living in a static optimization problem. This paper proposes a new method to construct a dynamic cost of living index (DCOLI). Our method offers several advantages compared to other dynamic cost of living indices proposed in the literature. First, our measure is based on total wealth. Previous indices limited attention to financial wealth. Second, we consider an Epstein-Zin preference structure. Most previous literature has used log preferences. We derive formulas that relate our DCOLI to the COLI and derive conditions under which the two coincide. We also produce empirical measures of our DCOLI. We find that under standard assumptions on preferences, the volatility of our DCOLI is about the same as that of the COLI. In certain periods, e.g., 1977–1983, our measure differs sharply from the COLI.dynamic cost of living index; cost of life; CPI

Aggregate Accuracy under Majority Rule with Heterogeneous Cost Functions

We investigate an election model with costly accuracy improvement by allowing heterogeneity in the cost functions. We find that the aggregate accuracy in large elections is characterized by the average value of the inverse of the second derivative at zero information.costly information acquisition

Efficiency versus Economy of Time in Multi-Unit Descending Auction: The Role of "Mari"at Flower Markets in Japan

The auctioning rule in Japanese flower markets is a slightly modified version of that of the original Dutch flower auction. At Japanese flower markets, there is an additional stage, called "mari", where buyers who lost in the previous auction can apply for purchasing the remainder of flowers at the same price as in the previous auction. We investigate the role of "mari" in multi-unit descending auction, and show that "mari" extensively speeds up the market procedure at the cost of sufficiently small loss of efficiency, compared to the original Dutch sequential auction.

Measuring the Dynamic Cost of Living Index from Consumption Data

In the U.S., the objective of consumer price index (CPI) measurement is to measure the cost of living. However, the current CPI or, in other words, cost of living index (COLI) measures the cost of living in a static optimization problem. This paper proposes a new method to construct a dynamic cost of living index (DCOLI). Our method offers several advantages compared to other dynamic cost of living indices proposed in the literature. First, our measure is based on total wealth. Previous indices limited attention to financial wealth. Second, we consider an Epstein-Zin preference structure. Most previous literature has used log preferences. We derive formulas that relate our DCOLI to the COLI and derive conditions under which the two coincide. We also produce empirical measures of our DCOLI. We find that under standard assumptions on preferences, the volatility of our DCOLI is about the same as that of the COLI. In certain periods, e.g., 1977–1983, our measure differs sharply from the COLI

Measuring the Dynamic Cost of Living Index from Consumption Data

In the U.S., the objective of consumer price index (CPI) measurement is to measure the cost of living. However, the current CPI or, in other words, cost of living index (COLI) measures the cost of living in a static optimization problem. This paper proposes a new method to construct a dynamic cost of living index (DCOLI). Our method offers several advantages compared to other dynamic cost of living indices proposed in the literature. First, our measure is based on total wealth. Previous indices limited attention to financial wealth. Second, we consider an Epstein-Zin preference structure. Most previous literature has used log preferences. We derive formulas that relate our DCOLI to the COLI and derive conditions under which the two coincide. We also produce empirical measures of our DCOLI. We find that under standard assumptions on preferences, the volatility of our DCOLI is about the same as that of the COLI. In certain periods, e.g., 1977–1983, our measure differs sharply from the COLI