AN EXPERIMENTAL ANALYSIS OF ENVIRONMENTS WITH LARGE COMMON COSTS AND UNCERTAIN SUPPLIES: APPLICATIONS TO SPACE STATION.

Persistent Link:
http://hdl.handle.net/10150/184094
Title:
AN EXPERIMENTAL ANALYSIS OF ENVIRONMENTS WITH LARGE COMMON COSTS AND UNCERTAIN SUPPLIES: APPLICATIONS TO SPACE STATION.
Author:
PORTER, DAVID PETER.
Issue Date:
1987
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
Suppose we are confronted with an environment which consists of large common costs and uncertain supplies. Furthermore, suppose the resources in this environment are being supplied by a public enterprise monopoly which is interested in maintaining economic efficiency while recovering costs incurred by the project. Then the above problem becomes one of institutional design. Even if conditions existed in which traditional marginal cost pricing provided the proper signals for efficiency, additional charges will be necessary to recover costs due to the large common costs in this environment. Ideas and suggestions about decentralized methods of covering common costs lead naturally to questions about decentralized methods for solving the public goods provision problem. This paper reports in part on an experimental investigation of four methods for allocating public goods. The two basic processes studied are direct contribution and a public goods auction process. Both of these processes are studied with and without an additional unanimity feature. The results suggest that the auction process outperforms direct contribution. The effect of unanimity is to decrease the efficiency of both processes. Strategic aspects of the voting rule (unanimity) are evident in the results. To assist in the contingency planning for environments with uncertain supplies, different contract forms are considered. In particular, priority and contingent contracting are investigated along with specific mechanisms to allocate such contracts. An experimental environment is developed to investigate the various contract forms and mechanisms. The experiment considers two contract forms (contingent and priority) and four allocation mechanisms (Random, English auction, English auction with queue, and Iterative Groves). The experimental results show that bidding for priority results in higher efficiency than pre-assignments. Furthermore, allowing individuals to signal coalitional bids has a positive effect on efficiency and revenue generated.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Space stations -- Economic aspects.; Investment of public funds.; Space stations -- Costs.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Department of Economics; Graduate College
Degree Grantor:
University of Arizona

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleAN EXPERIMENTAL ANALYSIS OF ENVIRONMENTS WITH LARGE COMMON COSTS AND UNCERTAIN SUPPLIES: APPLICATIONS TO SPACE STATION.en_US
dc.creatorPORTER, DAVID PETER.en_US
dc.contributor.authorPORTER, DAVID PETER.en_US
dc.date.issued1987en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractSuppose we are confronted with an environment which consists of large common costs and uncertain supplies. Furthermore, suppose the resources in this environment are being supplied by a public enterprise monopoly which is interested in maintaining economic efficiency while recovering costs incurred by the project. Then the above problem becomes one of institutional design. Even if conditions existed in which traditional marginal cost pricing provided the proper signals for efficiency, additional charges will be necessary to recover costs due to the large common costs in this environment. Ideas and suggestions about decentralized methods of covering common costs lead naturally to questions about decentralized methods for solving the public goods provision problem. This paper reports in part on an experimental investigation of four methods for allocating public goods. The two basic processes studied are direct contribution and a public goods auction process. Both of these processes are studied with and without an additional unanimity feature. The results suggest that the auction process outperforms direct contribution. The effect of unanimity is to decrease the efficiency of both processes. Strategic aspects of the voting rule (unanimity) are evident in the results. To assist in the contingency planning for environments with uncertain supplies, different contract forms are considered. In particular, priority and contingent contracting are investigated along with specific mechanisms to allocate such contracts. An experimental environment is developed to investigate the various contract forms and mechanisms. The experiment considers two contract forms (contingent and priority) and four allocation mechanisms (Random, English auction, English auction with queue, and Iterative Groves). The experimental results show that bidding for priority results in higher efficiency than pre-assignments. Furthermore, allowing individuals to signal coalitional bids has a positive effect on efficiency and revenue generated.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectSpace stations -- Economic aspects.en_US
dc.subjectInvestment of public funds.en_US
dc.subjectSpace stations -- Costs.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineDepartment of Economicsen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.committeememberCox, Jimen_US
dc.contributor.committeememberIsaac, Marken_US
dc.contributor.committeememberSmith, Vernonen_US
dc.identifier.proquest8712907en_US
dc.identifier.oclc698380147en_US
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