On the Formation of Buyer-Seller Relationships when Product Quality is Perfectly Observable

This study explores the formation of buyer-seller relationships in markets with observable quality. We develop a model that explains why relationships form in equilibrium within such markets. A key feature of our model is that as individuals gain experience in the marketplace, they resolve uncertainty over unobserved bargainer types. Relationships thus form as a means to reduce such transactions costs and uncertainty. We explore the usefulness of our theory by using a battery of simulations and experimental treatments. Overall, we find that our theoretical predictions are largely confirmed. Interestingly, the quantitative impact of relationships on overall market efficiency depends critically on the extend to which market structure affects the matching of buyers and sellers that could profitably transact. In certain important cases, a greater number of buyer-seller relationships can reduce market efficiency.Field experiments, pricing, market structure

DIMINISHING MARGINAL VALUE

The notion of diminishing marginal value has had a profound impact on the development of neoclassical theory. Early neoclassical scholars had considerable difficulty convincing contemporaries of the new paradigm's value until political economists, including Jevons and Walras, used the critical assumption of diminishing marginal value to link utility and demand. While diminishing marginal value remains a key component of modern economic intuition, there is surprisingly little empirical verification of its existence or level. This paper gathers field data across a myriad of subject pools--from undergraduate students to PTA members to sportscard enthusiasts--to examine several aspects of preferences in both price and exchange institutions. Examining behavior of nearly 900 subjects across several treatments, we find strong evidence of diminishing marginal value.Research Methods/ Statistical Methods,

Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment

This study develops theory and uses a door-to-door fundraising field experiment to explore the economics of charity. We approached nearly 5000 households, randomly divided into four experimental treatments, to shed light on key issues on the demand side of charitable fundraising. Empirical results are in line with our theory: in gross terms, our lottery treatments raised considerably more money than our voluntary contributions treatments. Interestingly, we find that a one standard deviation increase in female solicitor physical attractiveness is similar to that of the lottery incentive¡ªthe magnitude of the estimated difference in gifts is roughly equivalent to the treatment effect of moving from our theoretically most attractive approach (lotteries) to our least attractive approach (voluntary contributions).

Sub-Saharan Africa: Towards better governance and sustainability?

The countries of the Sub-Saharan region have, on average, made significant progress in governance performance, especially in terms of democratic accountability and public goods provision—findings that seem to contradict patterns of state fragility and economic underdevelopment common in the region. This article explores this seeming contradiction and presents in more detail findings from the Berggruen Governance Index regarding the governance performance of five countries, namely Ghana, Kenya, Nigeria, Senegal and South Africa. Lagging state capacity and growing sovereign debt emerge as critical factors, and the article suggests that they may be responsible for the inability of many countries in the region to consolidate gains in governance as well as economic performance

On narrowing coated conductor film: emergence of granularity-induced field hysteresis of transport critical current

Critical current density Jc in polycrystalline or granular superconducting material is known to be hysteretic with applied field H due to the focusing of field within the boundary between adjacent grains. This is of concern in the so-called coated conductors wherein superconducting film is grown on a granular, but textured surface of a metal substrate. While previous work has mainly been on Jc determined using induced or magnetization currents, the present work utilizes transport current via an applied potential in strip geometry. It is observed that the effect is not as pronounced using transport current, probably due to a large difference in criterion voltage between the two types of measurements. However, when the films are narrowed by patterning into 200-, 100-, or 80-micron, the hysteresis is clearly seen, because of the forcing of percolation across higher-angle grain boundaries. This effect is compared for films grown on ion-beam-assisted-deposited (IBAD) YSZ substrate and those grown on rolling-assisted-biaxially-textures substrates (RABiTS) which have grains that are about ten times larger. The hysteresis is more pronounced for the latter, which is more likely to have a weak grain boundary spanning the width of the microbridge. This is also of concern to applications in which coated conductors will be striated in order to reduce of AC losses.Comment: text-only: 10 pages, plus 5 figures on 5 page

The impact of management practices on employee productivity: a field experiment with airline captains

Increasing evidence indicates the importance of management in determining firms’ productivity. Yet causal evidence regarding the effectiveness of management practices is scarce, especially for skilled labor in the developed world. In a field experiment measuring commercial airline captains’ productivity, we test four distinct management practices: performance monitoring, performance feedback, target setting, and prosocial incentives. These practices—particularly monitoring and target setting—significantly increase captains’ productivity on the targeted fuel-saving dimensions, with positive spillovers on job satisfaction and CO 2 emissions. The study reveals an uncharted research opportunity to delve into the black box of firms to examine the determinants of productivity among skilled labor

CANLEX (Canadian Liquefaction Experiment): A One Year Update

The Canadian Geotechnical engineering community has embarked on a major study regarding the liquefaction of sand entitled The Canadian Liquefaction Experiment (CANLEX) through a collaborative effort of industry, engineering consultants and university participants, with the support of the Natural Sciences and Engineering Research Council of Canada (NSERC). The study is examining the characterization of sand for dynamic and static liquefaction. The project was started in 1993 and is expected to last at least 3 years with equal funding by both industry and NSERC for a total of about C$1.8M. This paper provides a brief progress report on the Project. Three test sites have been selected and characterized using in-situ testing, conventional sampling as well as in-situ freezing to obtain undisturbed samples. Laboratory testing is underway on both reconstituted samples and undisturbed samples. A full scale liquefaction event is planned for year three of the Project and a feasibility study regarding the event has been completed. As part of the planning for the liquefaction event some preliminary centrifuge testing has been carried out. A static liquefaction flow failure has been successfully produced in the centrifuge. As part of the Project, a set of definitions for liquefaction have been defined and a flow chart developed to aid in the liquefaction analyses

Auctions with Resale When Private Values Are Uncertain: Evidence from the Lab and Field

Auction theory represents one of the richest areas of research in economics over the past three decades. Yet, whether, and to what extent, the introduction of secondary resale markets influences bidding behavior in sealed bid first-price auctions remains under researched. This study begins by examining field data from a unique data set that includes nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia from 1996-2000. In comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not, we find evidence that is consistent with theory. Critical evaluation of the reduced-form bidding model, however, reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types. We therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted theoretical effect. We find that while it does have the predicted effect, a theoretical model based on risk-averse bidders explains the overall data patterns more accurately than a model based on risk-neutral bidders. Beyond testing theory, the paper highlights the inferential power of combining naturally occurring data with laboratory data.

Do Appeals to Donor Benefits Raise More Money than Appeals to Recipient Benefits? Evidence from a Natural Field Experiment with Pick.Click.Give.

We partnered with Alaska’s Pick.Click.Give. Charitable Contributions Program to implement a statewide natural field experiment with 540,000 Alaskans designed to explore whether targeted appeals emphasizing donor benefits through warm glow impact donations. Results highlight the relative import of appeals to self. Individuals who received such an appeal were 4.5 percent more likely to give and gave 20 percent more than counterparts in the control group. Yet, a message that instead appealed to recipient benefits had no effect on average donations relative to the control group. We also find evidence of long-run effects of warm glow appeals in the subsequent year