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Series 2008
08-01. Elbittar,
A., and A. Gomberg. "A
laboratory study of Demand Reduction and
Collusion in Uniform- and Discriminatory-Price
Auctions"
Abstract: We report results of an
experimental study of multi-object uniform
and discriminatory-price auctions in an
environment of publicly known common values,
concentrating on an environment where theory
predicts sharply different results of the
two auction formats. We find that the bidding
behavior in the uniform case exhibits two
clear regularities: agents consistently
play weakly dominated strategies by overbidding
on the first unit and have moderate difficulty
coordinating on the high payoff (low auction
revenue) equilibrium predicted by theory.
However, subjects with experience in the
same environment are better at reducing
demand to achieve higher payoff. Bidders
in discriminatory auctions, as predicted,
tend to submit bids close to value for all
units and are not generally successful in
attempts at collusion.
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08-02. Duggan,
J., and C. Martinelli. "The
Role of Media Slant in Elections and Economics"
Abstract: We formalize the concept
of media slant as a relative emphasis on
different issues of political interest by
the media, and we illustrate the effects
of the media choice of slant on political
outcomes and economic decisions in a rational
expectations model. In a two-candidate election,
if the media is biased in favor of the underdog,
then it will put more emphasis on issues
with a large electoral impact, hoping that
the news will deliver an upset victory.
Whether citizens are better off with media
biased in favor of the underdog or the frontrunner
depends on the importance of choosing the
"right" candidate for citizens
versus the impact of political news on the
private economic decisions of voters. Balanced
media, giving each issue equal coverage,
may be worse for voters than partisan media.
08-03. Domínguez,
D., and A. Nicolo. "Recursive
no-envy "
Abstract: In economics the main efficiency
criterion is that of Pareto-optimality. For
problems of distributing a social endowment
a central notion of fairness is no-envy (each
agent should receive a bundle at least as
good, according to her own preferences, as
any of the other agent's bundle). For most
economies there are multiple allocations satisfying
these two properties, which selects a single
allocation which is Pareto-optimal and satisfies
no-envy in two-agent exchange economies. There
is no straightforward generalization of our
procedure to more than two-agents.
08-04. Juárez,
L. "Are
Informal Workers Compensated for the Lack
of Fringe Benefits? Free Health Care as an
Instrument for Formality"
Abstract: This paper estimates the
effect of having a job covered by social security,
on the wages of female salaried workers. I
overcome the heterogeneity bias that typically
contaminates estimates by using the exogenous
availability of free health care and prescription
drugs implemented in 2001 in the part of Mexico
City that belongs to Distrito Federal (DF).
This program provides valid instruments because
health care is a substantial component of
the benefits provided by social security,
so the availability of alternative free health
care should decrease the incentive to contribute
to the system. In addition, eligibility for
this program is not correlated with individual
unobserved characteristics that affect either
wages or the choice of sector. My results
show that being a DF resident after free health
care was implemented has a negative an significant
effect on the probability that a female salaried
worker has social security in her current
job. Regarding wages, not controlling for
the endogeneity of formality on the wage regression
gives rise to a positive formal premium as
in previous studies for both developed and
developing countries. In contrast, my instrumental
variables results show that female salaried
workers in the formal sector earn between
16 to 23 percent less than female workers
in informal jobs. These results show that
workers who receive higher fringe benefits
are paid a lower wage, shich supports the
compensating differential theory. In the Mexican
context, it would also suggest that informal
salaried workers are not necessarily worse
off than their counterparts in the formal
sector.
08-05. Melissas,
N. "Bidding
and Drilling on Offshore Wildcat Tracts"
Abstract: I study a game in which firms
first bid on wildcat tracts and then time
their drilling decisions. In an equilibrium
bids are used as a coordination device: if
player i bid low while player -i
bid high, player i waits while player
-i drills. This equilibrium is consistent
with the empirical findings of Hendricks and
Porter (1996). Firms know that by bidding
"low" they can be allocated the
right to free-ride. This induces "optimistic"
firms to submit "low" bids. Nonetheless,
this equilibrium need not reduce expected
revenues as compared to the benchmark case
in which one abstracts from signalling issues.
08-06. Coady,
D., Martinelli, C., and S. Parker. "Information
and Participation in a Social Program"
Abstract: Participation in a social
program, like that in clubs and other social
organizations, is the result of a process
in which an agent first learns about the requirements,
benefits, and the likelihood of acceptance,
applies for membership, and finally is accepted
or rejected. At each stage of the process,
decisions made by the agent are responsive
to expectations about the decisions and outcomes
at the following stages. We propose a model
of the participation process and estimate
it using data from a social program in Mexico.
We are able to distinguish empirically between
information costs and other application costs,
and show that self-selection due to information
costs in fact contributes to targeting the
program to the poorest families.
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08-07. Meza,
F.,and C. Urrutia. "Great
Appreciations: Accounting for the Real Exchange
Rate in Mexico, 1988-2002"
Abstract: Between 1988 and 2002, the
real exchange rate in Mexico appreciated by
45%. We account for this movement in relative
prices using a two sector, dynamic general
equilibrium model of a small open economy
with tradable an non-tradable goods. The model
allows us to identify the effect of the differential
in productivity growth across sectors (the
Balassa-Samuelson effect) from other types
of shocks affecting the allocation of resources
(terms of trade, migration remittances and
international reserves accumulation). We find
that productivity growth in the tradable sector
and a decline in the real interest rate faced
by Mexico in the international markets account
for 70% of the real exchange rate appreciation.
Our model is also consistent with the reallocation
of capital and labor from tradable to non-tradable
sectors. None of our results support a significant
role for terms of trade, migration remittances
or international reserves accumulation.
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Comments: cie_itam@itam.mx
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