Designing Policies to Open Trade

In this paper we consider recent proposals to auction U.S. import quotas. using the funds so obtained to encourage relocation out of the protected industries. We argue that the information available to the government, or lack thereof, is a critical factor in understanding these policies. In a world or full information, it makes little sense to use auction quotas rather than tariffs. Similarly, it is unclear why an elaborate program of temporary protection is needed, rather than immediately opening trade and compensating people with an income transfer. When the government has Limited information, however, these policies become quite sensible and may even be optimal.

Bidding rings

We characterize coordinated bidding strategies in two cases: a weak cartel, in which the bidders cannot make side-payments; and a strong cartel, in which the cartel members can exclude new entrants and can make transfer payments. The weak cartel can do no better than have its members submit identical bids. The strong cartel in effect reauctions the good among the cartel members

Organizational Diseconomies of Scale

This paper models strategic behavior within firms. The principal (e.g., the firm's owner) is handicapped by not knowing as much about the firm's capabilities as the agent(s) (e.g., the manager). The agent can extract some rents from his private information. The principal can retrieve some of these rents at the expense of introducing a distortion, paying the agent less than the full value of his marginal product. As a result the firm operates inefficiently. The degree of this inefficiency varies with demand elasticity and with the length of the firm's managerial hierarchy. The costs of operating the hierarchy create a limit to the size of the firm

Bidding Rings

We characterize coordinated bidding strategies in two cases: a weak cartel, in which the bidders cannot make side-payments; and a strong cartel, in which the cartel members can exclude new entrants and can make transfer payments. The weak cartel can do no better than have its members submit identical bids. The strong cartel in effect reauctions the good among the cartel members

Synergies in Wireless Telephony: Evidence from the Broadband PCS Auctions

We examine bid data from the first two broadband PCS spectrum auctions for evidence of value synergies. First, we estimate a benchmark regression for the determinants of final auction prices. Then, we include variables reflecting the extent to which bidders ultimately won or already owned the adjacent wireless properties. Consistent with geographic synergies in an ascending-bid auction, prices were higher when the highest-losing bidder had adjacent licenses. The footprints of winning bidders suggest that they were often successful in realizing these synergies.Auctions; Multi-Object Auctions; Spectrum Auctions

Freedoms and Economic Growth: Transitional and Permanent Components

This paper investigates the empirical foundation for policy reform prescriptions suggested by the institutional approach to economic growth. The focus is the relationship between institutional reforms, measured by changes in a country\u27s political or civil rights, and economic growth. Empirical models previously estimated using cross-section data are extended by adding a temporal element. This allows an estimation of the timing of benefits following a reform. In addition to finding support for the idea that institutional reforms can cause increases in economic growth, five major implications emerge: (i) the economic benefits of freedom reforms are systematic and significant, (ii) economic benefits, in the form of increased growth, occur with a lag after the initiation of a reform in political rights or in civil liberties, (iii) reforms in civil liberties eventually require a reform in political rights in order to be sustained, (iv) changes in the capital-to-labor ratio have a larger effect on economic growth in the short run than in the long run, and (v) there remains significant and unexplained regional variation in the short-run effects of changes in the capital-to-labor ratio