According to the standard model of urban traffic congestion and urban spatial structure, congestion tolling results in a more concentrated city. In recent years, a new model of rush hour urban auto congestion has been developed which incorporates trip-timing decisions — the bottleneck model. In the simplest bottleneck model, optimal congestion tolling without toll revenue redistribution has no ...

This paper studies optimal access pricing for natural monopoly networks with large sunk costs and uncertain revenues. Using techniques from the option pricing literature, we show that the optimal access price corresponds to a risk-free form of the Efficiency Component Pricing Rule (ECPR), that is, where the opportunity cost is based on the risk free rate of return. We also show that at levels o...

We examine prior and current sponsored search auctions and find evidence of strategic bidder behavior. Between June 15, 2002, and June 14, 2003, we estimate that Overture’s revenue from sponsored search could have been more than 60% higher if it had been able to prevent this strategic behavior. We also show that advertisers’ strategic behavior has not disappeared over time; rather, such behavio...

In auctions with private information acquisition costs, we completely characterize (socially) efficient and (revenue) optimal two-stage mechanisms, with the first stage being an entry right allocation mechanism and the second stage being a traditional private good provision mechanism. Both efficiency and revenue optimality require that the second-stage selling mechanism be ex post efficient and...

How Tax Progression Affects Effort and Employment Within an efficiency wage framework, we study the effects of two revenue-neutral tax reforms that change the progressivity of the labour tax system. A revenue-neutral increase in both the wage tax and tax exemption and a revenue-neutral change in the composition of labour taxation towards the tax with the smaller tax base will lead to the same r...

We examine the relevance of an auction format in a competitive environment by comparing uniform and discriminatory price auctions with many bidders in a private values setting. We show that if the number of objects for sale is small relative to the number of bidders, then all equilibria of both auctions are approximately efficient and lead to approximately the same revenue. When the number of o...

  The present study is an attempt towards remodeling cost, revenue and profit relationship within the network process. The previous models of Data Envelopment Analysis (DEA) have been too general in their scope and focused on the input and the output within a black box system, therefore they have not been able to measure various phases simultaneously within a network system. By using these mod...

This paper shows how a popular system of federal revenue equalization grants can limit tax competition among subnational governments, correct fiscal externalities, and increase government spending. Remarkably, an equalization grant can implement efficient policy choices by regional governments, regardless of a wide variety of differences in regional tax capacity, tastes for public spending, and...

In this paper, we propose a low-complexity auction framework to distribute spectrum in real-time among a large number of wireless users with dynamic traffic. Our design consists of a compact and highly-expressive bidding format, two pricing models to control tradeoffs between revenue and fairness, and fast auction clearing algorithms to achieve conflict-free spectrum allocations that maximize a...

We compare the performance of three alternative multi-object auction institutions: simultaneous ascending auctions with the hard closing rule, simultaneous ascending auctions with the soft closing rule, and simultaneous first price sealed bid auctions. Among the three formats, the simultaneous ascending auction with the soft closing rule is the most efficient and produces outcomes closest to th...