The identification of factors contributing to the farmers' non-retention of subsidy dollars is key in identifying the impact of the subsidy within and across the sector. Relaxing the assumption of perfect competition, amongst input suppliers, allows for an analysis of two upstream of complementary goods. Because it is the case that the farmers are price takers for some inputs (seed) and may negotiate over the price of others (land), I assume the upstream input providers are more akin to Bertrand competition. General findings, from the theoretical and experimental results, indicate upstream market power as having a significant impact on the economic subsidy incidence; and the complementary between the farmer’s inputs is the main driving force of the results.

Empirical economics frequently involves testing whether a theoretical proposition is evident in a data set. This thesis explores methods for confronting such theoretical propositions with evidence. Chapter 1 develops a methodological framework for assessing whether binary (`Yes'/`No') observations exhibit a discrete change, confronting a theoretical model with data from an experiment investigating the effect of introducing a private finance option into a public system of finance. Chapter 2 expands the framework to identify two discrete changes, applying the method to the evaluation of adherence to clinical practice guidelines. The framework uses a combination of existing analytical techniques and provides results which are robust and visually intuitive. The overall result is a methodology for evaluation of guideline adherence which leverages existing patient care records and is generalizable across clinical contexts. An application to a set of field data on supplemental oxygen administration decisions of volunteer medical first responders illustrates. Chapter 3 compares the results of two mechanisms used to control industrial emissions. Cap and Trade imposes an absolute cap on emissions and any emission capacity not utilized by a firm can be sold to other firms via tradable permits. In Intensity Targets systems firms earn (owe) tradable credits for emissions below (above) a baseline implied by a relative Intensity Target. Cap and Trade is commonly believed to be superior to Intensity Targets because the relative Intensity Target subsidizes emissions. Chapter 3 reports on an experiment designed to test theoretical predictions in a long-run laboratory environment in which firms make emission abatement technology and output production decisions when demand for output is uncertain, and banking of tradable permits may or may not be permitted. Particular focus is placed on testing whether the flexibility inherent to Intensity Targets can lead them to be superior to Cap and Trade when demand is stochastic. / Thesis / Doctor of Philosophy (PhD)

No description available.

This thesis develops an experimental procedure to value the environmental benefits from two pre-production genetically modified (GM) products, MVR tomatoes and Bt eggplant. The procedure explicitly tells subjects the GM nature of the products, and frames the value as an actual donation to the scientific organization pursuing the product research. The procedure is tested in the United States and the Philippines. The tests suggest that United States students give significantly different values than Filipino farmers with Filipino farmers valuing the environmental benefits much higher than United States students. The tests also suggest that slight changes in procedures can significantly affect values. Subjects also use information learned during the experiment to form their valuations. For example, Filipino farmers significantly increase their values as the procedure progresses. / Master of Science

This thesis comprises four essays in the economics of networks and market design. The common thread in all these essays is the presence of complementarities or externalities. Chapter 2 presents a unified model of networks and matching markets. We build on a contribution by Pycia (2012). We show that strong pairwise alignment of agents’ preferences is a necessary and sufficient condition for the existence of strongly stable networks and strongly stable allocations in multilateral matching markets with finite contracts. Strongly stable networks are not necessarily efficient. Although we use a demanding stability concept, strong pairwise alignment allows for complementarities and externalities. In Chapter 3, we generalise the gross substitutes and complements condition introduced by Sun and Yang (2006). Our new condition guarantees the existence of competitive equilibrium in economies with indivisible goods. Competitive equilibrium can be found using an extension of the double-track adjustment process (Sun and Yang, 2009). In this chapter, we also study contract networks (Ostrovsky, 2008). We show that chain-stable contract allocations can exist even in cyclical contractual networks, such as electricity markets, as long as they are appropriately segmented. In Chapter 4, we run a series of experiments to compare the performance of four auctions – first-price, Vickrey, Vickrey-Nearest Rule (Day and Cramton, 2008), and Reference Rule (Erdil and Klemperer, 2010). In our setting, there are two items and three bidders. Two local bidders want an item each, but the global bidder wants both items. We introduce various exposure and package-bidding treatments. We find that the first-price auction always revenue-dominates all the other auctions without any loss in efficiency, strengthening the results of Marszalec (2011). Exposure affects global bidders only in the first-price auction. In other auctions, global bidders often do not take into account the effect of their own bids on their payments. We find no evidence of threshold effects. Finally, in Chapter 5, we develop a new model of online social network formation. In this model, agents belong to many overlapping social groups. We derive analytical solutions for the macroscopic properties of the network, such as the degree distribution. We study the dynamics of homophily – the tendency of individuals to associate with those similar to themselves. We calibrate our model to Facebook data from ten American colleges.

Sunk cost accounting refers to the empirical finding that individuals tend to let their decisions be influenced by costs made at an earlier time in such a way that they are more risk seeking than they would be had they not incurred these costs. Such behaviour violates the axioms of economic theory which states individuals should only consider incremental costs and benefits when executing investments. This dissertation is concerned whether the pervasive sunk cost phenomenon extends to corporate acquisitions and financial markets. 122 students from the University of St Andrews participated in three experiments exploring the use of sunk costs in interactive negotiation contexts and financial markets. Experiment I elucidates that subjects value the sunk cost issue higher than other issues in a multi-issue negotiation. Experiment II illustrates that bidders are influenced by the sunk costs of competing bidders in a first price, sealed-bid, common-value auction. In financial markets their exists an analogous concept to sunk cost accounting known as the disposition effect. This explains the tendency of investors to sell “winning” stocks and hold “losing” stocks. Experiment III demonstrates that trading strategies in an experimental equity market are influenced by a pre-trading brokerage cost. Not only are subjects influenced in the direction that reduces the disposition effect but also trading is diminished. Without the brokerage cost there was a significant disposition effect.

No description available.

This thesis uses laboratory experiments to develop a methodology to estimate the expected welfare benefits of insurance for individuals, conditional on their risk preferences. This methodology is then applied to study the welfare effects of issues that impact microinsurance, or insurance for the poor. The first result is that insurance take-up not a good proxy for the expected welfare gain of an individual’s choice to purchase or not to purchase insurance. The second result is that basis risk reduces the welfare obtained from index insurance. This welfare is significantly improved by having greater behavioral consistency with the Reduction of Compound Lotteries axiom. Finally, the risk of contract non-performance from the insurer significantly reduces the welfare obtained from insurance purchase decisions.

Les inégalités de revenu affectent-elles la fourniture des biens publics ? Warr a établi en1983 un théorème de neutralité : sous certaines conditions, une redistribution marginale des revenus entre agents n'affecte pas la quantité de bien public fournie par leurs contributions volontaires. Les généralisations de ce résultat par Bergstrom et al. (1986), ont permis de mieux comprendre ce phénomène : les redistributions neutres sont de " faible "amplitude de sorte que les agents dont le revenu a été amputé ont toujours la possibilité de maintenir leur dépense en biens privés, et les ajustements des contributions individuelles laissent inchangée la contribution agrégée au bien public. Itaya et al. (1997) se sont intéressés aux conséquences d'une redistribution non neutre sur le bien-être. Dans les deux premiers chapitres de cette thèse nous testons ces prédictions en laboratoire grâce à un jeu de bien public avec utilités quadratiques. Le premier chapitre considère une redistribution de " faible " amplitude qui ne devrait pas entrainer une modification de la quantité de bien public. En revanche dans le chapitre 2, la redistribution est d'une amplitude telle qu'elle affecte la quantité de bien public fournie et le bien-être de la société. Bien que nous retrouvions en laboratoire certaines prédictions théoriques, notamment au niveau de la modification ou non de la quantité de bien public produit et du bien-être, les prédictions concernant les comportements et les gains individuels sont rarement vérifiées. En particulier, nous observons que, suite à la modification de leur revenu, certains joueurs réduisent ou augmentent moins leur contribution que la théorie ne le prédit et que les agents pauvres sur-contribuent. Il semble enfin que l'émergence d'inégalités n'affecte pas de la même façon les comportements que lorsque ces inégalités préexistent et donc que le sens de la redistribution, selon qu'elle crée ou diminue les inégalités, importe. Dans le chapitre 3, nous étudions plus précisément une redistribution créatrice d'inégalités dans un jeu de bien public linéaire et nous regardons si les hommes et les femmes réagissent de la même façon à ce changement et quelles conséquences cela entraine sur la quantité de bien public fournie. Nous montrons que lorsque les femmes bénéficient de la redistribution,la quantité de bien public produit diminue. Il apparait aussi que les comportements sont modifiés lorsque les sujets connaissent le genre de ceux qui se sont enrichis. / Do income inequalities affect the provision of public goods? Warr established in 1983 a theorem of neutrality : under some conditions, a marginal redistribution of endowments among agents does not affect the amount of public good provided by their voluntary contributions. Generalizations of this result by Bergstrom et al. (1986), helped to better understand this phenomenon: neutral redistributions are those of "low" amplitude, so that agents whose income decreases can maintain their consumption of private goods, and adjustments of individual contributions leave unchanged the aggregate contribution to the public good. Itaya et al. (1997) have focused on the consequences of a non-neutral redistribution on welfare. In the first two chapters of this thesis we test these predictions in the laboratory using a public good game with quadratic utility functions. The first chapter considers a redistribution of a "low" amplitude that should not modify the amount of public good supplied. However in Chapter 2, we run a redistribution of a "high" magnitude so that it affects the amount of public good provided and the social welfare. Although some theoretical predictions are found in the laboratory, such as the modification or not of the amount of public good and of the welfare, predictions on individual behaviors and payoffs are rarely verified. In particular, we note that following a modification of their endowment, some subjects decrease or increase their contribution less than theory predicts and that poor agents over-contribute. It further appears that the emergence of inequalities does not affect behaviors in the same way than when these inequalities preexist and thus that the direction of the redistribution, depending on whether it creates or decreases inequalities, matters. In Chapter 3 we study more precisely a redistribution that creates inequalities in a linear public good game and we test wether men and women respond similarly to the modification of their endowment and what are the consequences on the supply of the public good. We show that when women become rich, the quantity of public good provided decreases. It also appears that behaviors are modified when the rich gender is common knowledge.

Information asymmetries, proprietary knowledge that one party in a trade holds over another party, in electronic markets might cause a loss in market efficiency and market failure. Reputation mechanisms may provide a means to reduce the effects of information asymmetry and prevent possible market failure. Feedback rating systems are among potential mechanisms to develop reputations. They are often used in naturalistic environment electronic market studies. Reputation mechanisms are difficult to assess, however, in naturalistic research settings since the researcher cannot control the many variables of interest. To control the variables, this study used an experimental research setting. The setting enabled buyer and seller values to be controlled to study the impact of reputation mechanisms on market efficiency and price premiums. A theory from economics, the induced value theory, was used to modify subject preferences through the use of a reward medium. The experimental market was implemented in a classroom environment patterned on Holt's (1999) design. University students accessed a Website that enabled a fictitious market in which the students acted as buyers and sellers of a fictitious product. The product is valued with a fictitious currency which has no real-world value. This allows for values to be induced. Two market control conditions were established, a full information near 100% efficient condition, which is the `ceiling' expectation, and a fairly low efficient condition in which no seller or product grade information was available to buyers, is the `floor' or "Lemons" condition. Two treatments, `cheaptalk', where sellers can make unverifiable product claims, and `feedback', where seller identity and historical ratings are available to buyers, were tested. The impact of asymmetric information on market efficiency was evaluated, as was the impact of a feedback rating mechanism on enhancing market efficiency. Analysis of the experiment results indicate that the treatments can be ordered as: Full Information-Feedback-Cheaptalk-Lemons, with regard to the affect of information on market efficiency.