RAND Journal of Economics articles from December 2005

RAND Journal of Economics archives from December 2005

Wealth constraints and option contracts in models with sequential investments.
December 22, 2005... I investigate a model in which two parties A and B invest sequentially in a joint project (an asset). Investments and the asset value are nonverifiable, and A is wealth-constrained so that an initial outlay must be financed by either an agent,...

Unobserved product differentiation in discrete-choice models: estimating price elasticities and welfare effects.
December 22, 2005... Commonly used discrete-choice models such as logit, nested logit, and random-coefficients models place very strong restrictions on how unobservable characteristic space changes with the number of products. We argue (and show with Monte Carlo...

Financing auction bids.
December 22, 2005... In many auctions, bidders do not have enough cash to pay their bid. If bidders have asymmetric cash positions and independent private values, then auctions will be inefficient. However, what happens if bidders have access to financial markets?...

Adoption of standards under uncertainty.
December 22, 2005... The presence of noise in compliance times may have a critical impact on the selection of new technological standards. A technically superior standard is not necessarily viable because an arbitrarily small amount of noise may render coordination...

An economic theory of the Fifth Amendment.
December 22, 2005... The Fifth Amendment's due process clause requires the prosecution to share evidence with the defense, and the right to silence that it guarantees blocks the jury from drawing an adverse inference from a defendant's silence during trial. I...

Fiscal interactions and the costs of controlling pollution from electricity.
December 22, 2005... I quantify the costs of controlling S[O.sub.2], carbon, and N[O.sub.x] emissions from power generation, accounting for interactions between environmental policies and the broader fiscal system. I distinguish a dirty technology (coal) that...

Nonparametric analysis of cost complementarities in the telecommunications industry.
December 22, 2005... Using data on local exchange carriers (LECs), I estimate the total cost function of LECs operating between 1988 and 1995. First, I show that cost complementarities can be nonparametrically identified in many situations where economies of scope...

An experimental analysis of ending rules in Internet auctions.(Amazon.com Inc.)(eBay Inc.)
December 22, 2005... A great deal of late bidding has been observed on eBay, which employs a second price auction with a fixed deadline. Much less late bidding has been observed on Amazon, which can only end when ten minutes have passed without a bid. In controlled...

The effect of ownership structure on prices in geographically differentiated industries.
December 22, 2005... I analyze how ownership structure and market geography jointly influence fast food prices. I estimate a model of demand and supply that accounts for the market geography and run counterfactual experiments that demonstrate how mergers affect...

Barriers to innovation and subsidy effectiveness.
December 22, 2005... We explore the effects of subsidies by means of a model of firms' decisions about performing R&D when some government support can be expected. We estimate it with data on about 2,000 performing and nonperforming Spanish manufacturing firms. We...

Efficiency costs of meeting industry-distributional constraints under environmental permits and taxes.
December 22, 2005... Many pollution-related industries have political influence sufficient to block policies that would harm their profits. A politically realistic approach to environmental policy seems to require avoiding significant profit-losses to these...