Friday Meeting - Ron Harstad (University of Missouri)

"Efficiency Measurement via Revealed Thresholds, Without Knowing Valuations"
Quand ? Le 03-02-2017,
de 10:00 à 12:00
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3 February 2017 –

SCI ISEM – 10:00-12:00

Ron Harstad (University of Missouri)

Title: Efficiency Measurement via Revealed Thresholds, Without Knowing Valuations

AbstractLaboratory experiments employing an induced-values methodology often report on allocative efficiencies observed.  That methodology requires experimenters know subjects’ motivations precisely, questionable in labs, impossible in field experiments.  Allocative efficiency implies a hypothetical costless aftermarket would be inactive.  An allocation mechanism’s outcome is defined to be behaviorally efficient if an appropriate aftermarket is actually appended to the mechanism and measures at most a negligible size of remaining mutually beneficial gains.  Methodological requirements for an appropriate aftermarket are specified.  A first demonstration observes more frequent and ex-ante larger behavioral inefficiencies in second- than in first-price auctions.  A simple field demonstration indicates when a public-good increase can be observed to cover marginal cost to subjects’ mutual benefit, without knowing valuations.  A wide variety of empirical economic-policy studies can utilize this methodology to observe comparative evidence of alternative policies’ allocative-efficiency shortfalls.

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