College of Behavioral & Social Sciences
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Item Open Bid Auctions: A Theoretical and an Experimental Study(2008-02-21) ghosh, dipan; Cramton, peter; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)For centuries, auctions have been used as an efficient market mechanism for selling or procuring goods. Over time, auctions have evolved from its very basic price call-out form to the much more sophisticated simultaneous multi goods design, the bulk of this dramatic evolution taking place in the later part of the twentieth century. Even though the earliest use of auction dates back to around 500 B.C. in history, proper scientific research aiming at improving the effectiveness or expanding the scope of this versatile market mechanism started around the 1960's. The pioneering work of William Vickrey in 1961 opened the floodgates for mathematicians and economists alike, to study this fascinating market mechanism, and within a very short period of time, both the understanding of the mechanism and the scope of its application improved vastly. Over these years, a huge mass of theoretical and empirical research has produced results that introduce newer auction designs and characterize the existing ones. This has also allowed scope for continued research in the field of auctions, thriving for improvements and solutions to yet-to-be answered questions. The main goal of this study is to accomplish just that; present improvements that try to address issues that have not been addressed yet. The dissertation is structured as follows. The first chapter highlights the progress that has been made in the field of auctions and introduces the advancements made in the more recent field of auction experiments. This serves as an introduction to the other chapters and briefly outlines the important findings both in the traditional theoretical literature, the more recent operational research literature and the alternative experimental literature. The second chapter introduces a new auction model designed to tackle a specific problem encountered in multiple homogeneous goods auctions, which has not been dealt with satisfactorily thus far. The last chapter presents an extension of the existing auction experiment methodologies in an attempt to reveal possible weaknesses in earlier auction experiments and to improve our understanding of important differences between open and sealed-bid auction formats.Item Essays in Public Finance(2006-05-16) Pang, Gaobo; Rust, John P; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Chapter 1 analyzes effects of tax-favored savings plans on savings and retirement decisions in a realistically specified life-cycle model. Individuals face mortality risk and stochastic earnings, allocate assets between conventional savings accounts (CSAs) and tax-deferred accounts (TDAs), make endogenous choice of labor supply and retirement, and make a separate decision on claiming Social Security. The simulations reveal that there is a functional division to some degree between CSAs and TDAs, with the former serving mainly for liquidity and the latter for retirement and bequests. There is tremendous heterogeneity. The tax incentives are generally effective in stimulating new savings for the middle and upper income groups. The higher rate of return on TDAs facilitates wealth accumulation, which consequently and perhaps unintentionally encourages early retirement. Impatient and low-income individuals tend to retire and claim Social Security early. They derive less benefit from TDAs since they face lower marginal tax rates and they have limited resources to take advantage of TDAs. For them, the income effect dominates and TDAs fail to induce new savings. Chapter 2 attempts quantitatively to measure the efficiency of public spending in developing countries. The efficiency is defined as the distance between observed input-output combinations and an efficiency frontier. Both input- and outputefficiencies are estimated for several health and education output indicators by means of the Free Disposable Hull (FDH) and Data Envelopment Analysis (DEA) techniques. This chapter further seeks to verify empirical regularities associated with cross-country efficiency variation. The panel Tobit regressions reveal that countries are more likely to register lower efficiency if they are faced with higher government expenditure levels, larger wage shares in government budget composition, higher ratios of public to private financing in service provision (health), more prevalence of HIV/AIDS epidemic (health), stronger external aid dependency, and/or higher income inequality (education). Though no causality may be inferred from these exercises, they help point at different factors to understand why some countries spend more resources than others to achieve similar educational and health outcomes.