Information Asymmetry in Mauritius Slave Auctions

Evidence on adverse selection in slave markets remains inconclusive. A necessary prerequisite is that buyers and sellers have different information. We study informational asymmetry on the slave markets through notarial acts on public slave auctions in Mauritius between 1825 and 1835, involving 4,286 slaves. In addition to slave characteristics, the acts document the identities of buyers and sellers. We use this information to determine whether the buyer of a slave was related (e.g. a relative or a spouse) to the original slave owner, and thus most likely better--informed than other bidders. Auction--theoretic models predict that bidding should be more aggressive when informed bidders are present in open-bid, ascending auctions, such as slave auctions. By proxying informed bidders by related bidders, our results consistently indicate that this is the case, pointing toward the presence of information asymmetry in the market for slaves in Mauritius

Asymmetric information and adverse selection in mauritian slave auctions

Information asymmetry is a necessary prerequisite for testing adverse selection. This paper applies this sequence of tests to Mauritian slave auctions. The theory of dynamic auctions with private and common values suggests that when an informed participant is known to be active, uninformed bidders will be more aggressive and the selling price will be higher. We conjecture that observable family links between buyer and seller entailed superior information and find a strong price premium when a related buyer purchased a slave, indicative of information asymmetry. We then test for adverse selection using sale motivation. Our results indicate large discounts on voluntary as compared to involuntary sales. Consistent with adverse selection, the market anticipated that predominantly low-productivity slaves would be brought to the market in voluntary sales

Dynamic production teams with strategic behavior

We analyze if intergenerational teams reveal workers' productivities. Some uncertainty on agents' productivities persists when (i) each agent must work independently, or (ii) technological shocks are agent-specific in compulsory teams. However, when technological shocks are team-specific in compulsory teams, each worker's productivity is revealed. When agents choose to work independently or in teams, that problem falls in the class of dynamic games. Elective teams are preferred by high-productivity young workers when the technological shocks are agent-specific, and maximize the expected utility of a young worker when shocks are team-specific

Slave Prices from Succession and Bankruptcy Sales in Mauritius, 1825-1827

We construct a unique data set from succession and bankruptcy sales in Mauritius to investigate the determinants of slave prices between 1825 and 1827. We find that males, females sold with children, skilled slaves and slaves sold during the peak sugar cane harvest season all fetched higher prices. In comparison, handicapped and non-native slaves were sold at a discount. Moreover, the young child premium increased over the period. This may indicate that slave owners did not anticipate that slavery would be abolished in the near future or thought that they would be compensated in such an event

Reputation in Endogenous Production Teams

Team production analysis are usually carried in static frameworks where employees choose neither their teammates nor between working in a team or by themselves. This hypothesis does not reflect certain work environments. For example, academics are seldom forced to work as a team. They usually choose with whom they want to work, and once a project is completed they may part. In the industry, a manager at Jet Propulsion Laboratory states: "There is some say by team members on whom they want to work with. Regarding rewards, a good job by the team bestow the reputation for further jobs'' (Sherstyuk, 1998). This paper computes optimal work strategies when agents either work in a team or by themselves. Agents of different age and reputation are randomly matched. Matched agents, but not employers, observe each other's abilities. Agents' abilities and production are stochastic, and wages equal the conditional probability of being of high-ability (i.e an agent's reputation). Given that a teammate's decision to work or not in a team (control variable), affects the other agent's current and future utility and reputation (the state variable), this problem is a dynamic game. We focus on Markov strategies which are subgame perfect. The nature of the game does not allow for closed form solutions and we resort to numerical methods. Results show that a worker opts in team provided her teammate's reputation does not penalize him. If working in a team damages an agent's reputation she opts out unless her teammate wishes and can compensate him. For instance, a high-ability young worker chooses to work with a high-ability adult when the latter's reputation is sufficiently high compared with the unconditional probability that she be of the high ability. Interestingly, a young agent who {chooses} to work by himself enjoys a higher utility than when she is compelled to do so. This result arises as agents value the option of forming a team when adult. In other words workers derive non-negative utility from the team option which affect the conditional probability that they be identified of high ability.Dynamic games, Learning models

Asymmetric Information and Adverse Selection in Mauritian Slave Auctions

Canada and the CIRPÉE. We are indebted to Shirley Chenny for outstanding research assistance. We thank the staff at the Mauritius Archives for their help in locating the notarial acts and Benoit Aboumrad for his help in collating information. We have benefitted from extensive comments provided by two anonymous referees and the managing editor. We are also thankful for comments from and discussions with Moez Bennouri, Jean-Marc Bourgeon, Liam Brunt, C. Abstract Information asymmetry is a necessary prerequisite for testing adverse selection. This paper applies this sequence of tests to Mauritian slave auctions. Dynamic auction theory with private value highlights more aggressive bidding by uninformed bidders and higher prices when an informed participant is active. We conjecture that observable family links between buyer and seller entailed superior information and find a strong price premium when a related buyer purchased a slave, indicative of information asymmetry. We then test for adverse selection using sale motivation. Our results indicate large discounts on voluntary as compared to involuntary sales. Consistent with adverse selection, the market anticipated that predominantly lowproductivity slaves would be brought to the market in voluntary sales. JEL Classification: D 82, N 3