This paper explains a technique and presents empirical results for measuring the change in elderly consumer’s welfare due to price changes in items in the Consumer Price Index (CPI). A new approach for measuring welfare changes due to price changes in owner-occupied housing in a static and dynamic setting is the cornerstone of this research. The model treats housing as an asset with the fundame...

T his article describes an important improvement in the calculation of the Consumer Price Index (CPI). The Bureau of Labor Statistics plans to use a new geometric mean formula for calculating most of the basic components of the Consumer Price Index for all Urban Consumers (CPI-U) and the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This change will become effective ...

We study a buyer who periodically auctions off short-term supply contracts among her supply base. To mitigate significant cost shocks to procurement the buyer can diversify her supply base by selecting suppliers from different regions. We find that the buyer’s decision to diversify depends on her bid-taker power, that is, her ability to choose the auction mechanism. At one extreme, when the buy...

We consider a pure public goods economy with a continuum of agents. In the standard model, the optimal public good levels will generally be infinitely larger than the private good consumption levels. This does not seem to be a reasonable or even a comprehensible limit of a large economy. We propose instead to model internet and other intellectual content as our canonical public goods. We argue ...

Industries are rarely perfectly competitive. They also rarely comprise only firms who transact solely with consumers. Rather, in many industries—including health care, technology, media, and finance—firms are oligopolistic and negotiate terms of trade with one another across different market segments. Understanding how firms compete and interact in these vertical markets is critical not only fo...

1. Introduction and Motivation The International Price Program (IPP) publishes monthly price indexes which measure the average change over time in prices of internationally traded products and services. IPP's sampling methodology supports its published merchandise price indexes by attempting to maintain a minimum number of items over the two year life cycle 1 of each published stratum. Retentio...

In the space of designs by which to auction off a single good, we have seen that there is a significant difference between a payment scheme that charges the second-highest bid, and one in which bidders pay their bids. In this lecture, we introduce a new payment and allocation scheme, called the posted-price mechanism, in which the auctioneer announces (i.e., posts) the price π at which they are...

Beneficiaries of the Old-Age, Survivors, and Disability Insurance (OASDI) program received an 11.2-percent cost-of-living increase in benefits effective June 1981. This increase, the seventh automatic increase since 1975, was reflected in btiefit checks issued early in July. Automatic benefit increases are tied by statute to rises in the Consumer Price Index (CPI). They are initiated whenever t...

Auctions are a popular way to raise money for charities, but relatively little is known, either theoretically or empirically, about the properties of charity auctions. We conduct field experiments to see which sealed bid format, first price, second price or all-pay, raises the most money. Our experiment suggests that both the all-pay and second price formats are dominated by the first price auc...

The literature provides some stylized guidelines for choosing between skimming and penetration pricing for new products in simple competitive scenarios. However, these guidelines do not resolve the practical dynamic pricing problem in the current complex dynamic environments, characterized by numerous brands, each with multiple products and price points, and differentiated on a variety of produ...