Optimal Design of the Online Auction Channel: Analytical,Empirical, and Computational Insights*

The focus of this study is on business‐to‐consumer (B2C) online auctions made possible by the advent of electronic commerce over an open‐source, ubiquitous Internet Protocol (IP) computer network. This work presents an analytical model that characterizes the revenue generation process for a popular B2C online auction, namely, Yankee auctions. Such auctions sell multiple identical units of a good to multiple buyers using an ascending and open auction mechanism. The methodologies used to validate the analytical model range from empirical analysis to simulation. A key contribution of this study is the design of a partitioning scheme of the discrete valuation space of the bidders such that equilibrium points with higher revenue structures become identifiable and feasible. Our analysis indicates that the auctioneers are, most of the time, far away from the optimal choice of key control factors such as the bid increment, resulting in substantial losses in a market with already tight margins. With this in mind, we put forward a portfolio of tools, varying in their level of abstraction and information intensity requirements, which help auctioneers maximize their revenues.     

Linking IT Applications with Manufacturing Strategy: An Intelligent Decision Support System Approach

Research has indicated the importance of matching Information Technology (IT) applications or manufacturing systems with the competitive strategy of a company. Selection of the right type of IT application is, however, a challenging task. When a company with a given dominant process structure emphasizes two or more competitive priorities, such as quality, product flexibility, etc., an unaided manager faces a complex decision problem in choosing from alternative IT applications available in the areas of product design through distribution. In this paper, we develop an Intelligent Decision Support System (IDSS) to assist managers with assessment of the relative importance of competitive priorities in their organization, evaluation of the fit between the competitive priorities and their dominant process structure, and identification of the IT applications that are consistent with both the competitive priorities and the process structure. The IDSS is comprised of an interactive user interface, a knowledge database, a decision model, and a Knowledge-Based System (KBS) that was developed using the 1st Class KBS shell. Validation of the system illustrates that its performance is as good as the human expert, and it has the potential to facilitate effective and swift decision making in the selection of appropriate IT applications that best match an organization's manufacturing strategy. The choice and use of the right type of IT application should provide a company with a competitive edge.     

Compliance Strategies under Permits for Emissions

We characterize the trade‐offs among firms' compliance strategies in a market‐based program where a regulator interested in controlling emissions from a given set of sources auctions off a fixed number of emissions permits. We model a three‐stage game in which firms invest in emissions abatement, participate in a share auction for permits, and produce output. We develop a methodology for a profit‐maximizing firm to derive its marginal value function for permits and translate this value function into an optimal bidding strategy in the auction. We analyze two end‐product market scenarios independent demands and Cournot competition. In both scenarios we find that changing the number of available permits influences abatement to a lesser extent in a dirty industry than in a cleaner one. In addition, abatement levels taper off with increasing industry dirtiness levels. In the presence of competition, firms in a relatively clean industry can, in fact, benefit from a reduction in the number of available permits. Our findings are robust to changes in certain modeling assumptions.     

Enforcement matters: The effective regulation of labour

The distinction between de jure and de facto regulation is well understood in theory, but has rarely been applied to cross‐country empirical work on the impact of labour regulation on labour market outcomes for lack of data. Policy debate has been based on measures of stringency of law, suggesting a negative correlation between labour regulation and labour market outcomes. This article provides new cross‐country measures of labour law enforcement and evidence of a negative correlation between stringency and intensity of enforcement. Previous results concerning the consequences of labour regulation and the legal origins theory no longer hold when a measure of effective labour regulation is used.     

All in the Family: How Do Social Capital and Material Wellbeing Affect Relational Wellbeing?

We use a unique dataset from Italy to investigate the impact of socioeconomic characteristics and social capital on family wellbeing and satisfaction. We assess wellbeing using four dimensions of satisfaction with family life: satisfaction with decision making processes, with relationships with partner and children, and with time spent with children. Social capital is measured through information about membership in organizations, trust, and interactions with others. We find that while socioeconomic characteristics in general do not have strong effects on family wellbeing, social capital matters for family life satisfaction.

     

Ampleur et modalités du non‐respect de la loi sur le travail dans l'industrie en Inde

S'il est notoire que le non‐respect du droit du travail est monnaie courante dans les pays en développement, on n'a guère d'éléments précis sur son ampleur. Les auteurs ont quantifé les violations de la loi indienne sur les établissements industriels: les entreprises contrevenantes sont le double de celles qui respectent la législation, mais aussi bien plus nombreuses que celles qui l'évitent. Ainsi ce non‐respect est‐il une caractéristique du «segment intermédiaire manquant» en Inde. Les auteurs explorent les grandes tendances et les modalités de ces violations et montrent les pistes à suivre par la recherche et pour l'action.     

On the asymptotic behavior of maxima and near-maxima of random observations from three parameter lognormal distribution

In this article, we show that linearly normalized partial maxima of random observations from a three-parameter lognormal distribution converges weakly to a Gumbel distribution and establish a strong convergence theorem. We also discuss the asymptotic behavior of the number of near-maxima and sum of near-maxima random variables.     

Uncertainties in the CIIT Model for Formaldehyde-Induced Carcinogenicity in the Rat: A Limited Sensitivity Analysis–I

Scientists at the CIIT Centers for Health Research (Conolly et al., 2000, 2003; Kimbell et al., 2001a, 2001b) developed a two-stage clonal expansion model of formaldehyde-induced nasal cancers in the F344 rat that made extensive use of mechanistic information. An inference of their modeling approach was that formaldehyde-induced tumorigenicity could be optimally explained without the role of formaldehyde's mutagenic action. In this article, we examine the strength of this result and modify select features to examine the sensitivity of the predicted dose response to select assumptions. We implement solutions to the two-stage cancer model that are valid for nonhomogeneous models (i.e., models with time-dependent parameters), thus accounting for time dependence in variables. In this reimplementation, we examine the sensitivity of model predictions to pooling historical and concurrent control data, and to lumping sacrificed animals in which tumors were discovered incidentally with those in which death was caused by the tumors. We found the CIIT model results were not significantly altered with the nonhomogeneous solutions. Dose-response predictions below the range of exposures where tumors occurred in the bioassays were highly sensitive to the choice of control data. In the range of exposures where tumors were observed, the model attributed up to 74% of the added tumor probability to formaldehyde's mutagenic action when our reanalysis restricted the use of the National Toxicology Program (NTP) historical control data to only those obtained from inhalation exposures. Model results were insensitive to hourly or daily temporal variations in DNA protein cross-link (DPX) concentration, a surrogate for the dose-metric linked to formaldehyde-induced mutations, prompting us to utilize weekly averages for this quantity. Various other biological and mathematical uncertainties in the model have been retained unmodified in this analysis. These include model specification of initiated cell division and death rates, and uncertainty and variability in the dose response for cell replication rates, issues that will be considered in a future paper.     

Does philanthropy reduce inequality?

Wealthy individuals often voluntarily provide public goods that the poor also consume. We show that, rather than reducing it, such philanthropy may aggravate absolute inequality in welfare achievement, while leaving the change in relative inequality ambiguous. Additionally, philanthropic preferences may increase the effectiveness of policies to redistribute income, instead of weakening them. Our results thus suggest that philanthropy and direct redistribution may often be better viewed as complements, rather than substitutes, in the context of inequality reduction. In so doing, they also bring into question the general normative case for large tax deductions for charitable contributions.