IN SEARCH OF THE WINNER'S CURSE

Earlier papers on the winner's curse have provided theoretical arguments that winning bidders in an auction will incur ex post losses even when all bidders use reasonable ex ante bidding strategies. This paper demonstrates that these arguments are erroneous: optimal ex ante bidders will never suffer from a winner's curse in an auction where only the winning bid is announced; furthermore, such bidders will on the average not suffer from a winner's curse in an auction where all bids are announced. Thus if a winner's curse is a behavioral reality then bidders are not generally using ex ante optimal strategies.     

THE IMPACT OF PAYING INTEREST ON RESERVES IN THE PRESENCE OF GOVERNMENT DEFICIT FINANCING

This paper reexamines the impact that paying interest on reserves has on price level indeterminacy, volatility, and economic well‐being. Unlike the previous literature, this model includes an after‐tax deficit financed by assets (bonds and reserves) whose returns are linked. I show that the number of steady‐state equilibria and the corresponding level of indeterminacy are equal to, or greater than, those arising in the no‐interest economy. When the level of indeterminacy is the same, the economic volatility is reduced by paying interest. However, greater indeterminacy in the interest economy results in greater volatility. Finally, paying interest on reserves can enhance welfare. (JEL D6, E3, E5)     

AFTER-SCHOOL PROGRAM EFFECTS ON BEHAVIOR: RESULTS FROM THE 21ST CENTURY COMMUNITY LEARNING CENTERS PROGRAM NATIONAL EVALUATION

This paper presents evidence on after-school programs' effects on behavior from the national evaluation of the U.S. Department of Education's 21st Century Community Learning Centers after-school program. Findings come from both of the study's components: (1) an elementary school component based on random assignment of 2,308 students in 12 school districts and (2) a middle school component based on a matched comparison design including 4,264 students in 32 districts. Key findings include higher levels of negative behavior for elementary students and some evidence of higher levels of negative behaviors for middle school students . ( JEL I21)     

EXPERIMENTAL COMPARISONS OF AUCTIONS UNDER SINGLE-AND MULTI-UNIT DEMAND

An English clock auction and a sealed-bid auction with lowest accepted-bid pricing are studied in a controlled laboratory setting. Buyers bid for either a single unit or two units of the good. The sealed-bid auction generates more revenue than the English clock auction in both cases. The revenue from the English clock auction is lower in the two-unit demand environment than in the single-unit demand environment, due to strategic demand reduction on the part of bidders. (JEL C92, D44)     

Increasing Risk: Some Direct Constructions

This article extends the classic RothschildNStiglitz characterization of comparative risk ("increasing risk") in two directions. By adopting a more general definition of "mean preserving spread" (MPS), it provides a direct construction of a sequence of MPS's linking any pair of distributions that are ranked in terms of comparative risk. It also provides a direct, explicit construction of a zero-conditional-mean "noise" variable for any such pair of distributions. Both results are extended to the case of second order stochastic dominance.