Peter Hans Matthews

Charity auctions: a field experiment*

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 auction. Our design also allows us to identify differential participation as the source of the difference between existing theory and the field.

Workplace democracy in the lab

While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial effects, empirical evidence of such effects is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a real-effort experiment confirming that worker performance is sensitive to the process used to select the compensation contract. Groups of workers that voted to determine their compensation scheme provided significantly more effort than groups that had no say in how they would be compensated. This effect is robust to controls for the compensation scheme implemented, worker characteristics such as ability and gender, and possible sorting.

Norm Enforcement: The Role of Third Parties

To be effective, norm enforcement often requires the participation of unaffected third parties. The logic of third-party intervention has, however, proven elusive because the costs always seem to outweigh the benefits. Using an evolutionary game theoretic approach, we posit that the intervention of unaffected bystanders is a triggered normative response and show that generalized punishment norms survive in one of the two stable equilibria subject to selection drift.

Incentives and Superstars on the LPGA Tour

Following Ehrenberg and Bognanno (1990a, b), this study explores the role of incentives on the 2000 LPGA Tour. Overall, it finds them to have limited effectiveness. Several possible explanations are considered, including unmeasured differences in both abilities and courses and variations in the distribution of prizes across tournaments. The existence of a ‘superstar effect’ is also considered.

The modern foundations of Marx's monetary economics

The first chapters of Capital are still often ‘tlerated’, Mirowski (1986: 222) reminds us, as a ‘regrettable metaphysical residuum of [Maxs] Hegelian [past]’. Such ‘tolerance’ has unfortunate consequences, howeve, not the least of which is Marxs reputation for ‘theoretical metallism’, simple and derivative. This paper builds on the recent efforts of de Brunhoff (1981), Lavoie (1983) and others to deconstruct, with support from Grundrisse and related texts, the important thrid chapter of Capital, Marxs account of the universal equivalents four functions. As it is identified here, the chapters core includes ‘pody-Keynesian’ elements– a reversal of the Ricardian view of the quantity equation, an effective demand principle in which capitalists’ dcisions about the recommitment of hoards assume a prominent role, and the deermination of interest rates, in the short term, on the basis of liquidity preference-– but does not include, in the conventional sense, a commodity theory of money.

Paradise lost and found? The econometric contributions of Clive W. J. Granger and Robert F. Engle

This paper provides a non-technical and illustrated introduction to the econometric contributions of the 2003 Nobel Prize winners, Robert Engle and Clive Granger, with a special emphasis on their implications for heterodox economists.

Net interstate migration revisited

The paper revisits the work of Sommers and Suits on net interstate migration in the USA. Adopting the same framework, consideration is given to the effects of differences in income, welfare expenditures, employment opportunities and ‘regional preferences’ on the behaviour of migrants in the mid-1990s. The question is asked whether variations in health insurance coverage have produced interstate ‘job lock’. The robustness of the model is also evaluated in some detail.

An Econometric Model of the Circuit of Capital

The circuit of value outlined in the second volume of Marxs Capital provides a coherent framework for the characterization of macroeconomic phenomena from a classical perspective. This paper builds on Foleys (Journal of Economic Theory, 28 (1982), pp. 300-319) formal reconstruction of the circuit to derive estimable forms for its three critical mechanisms: the production, realization and recommittal lags. The entire model is then estimated for the United States over the period 1948-89 on the basis of the Shaikh and Tonak (Measuring the Wealth of Nations: The Political Economy of National Accounts, Cambridge University Press, New York, 1995) data set, and the results are used to explore a number of current controversies, including (on the basis of simulation exercises) the consequence of various deficit reduction proposals.

Charity auctions in the experimental lab

To transform donations “in kind” into cash, charities of all sizes use auctions and raffles. Despite this, neither the theory nor the practice of efficient fund-raising – and, in particular, charity auctions – has received sufficient attention from economists, especially the fact that participation in fund-raisers is endogenous. We describe, in detail, the design and implementation of an experiment to examine 15 charity auction mechanisms. While some of the mechanisms have already received attention from both theorists and empiricists, ours is the first comprehensive examination of all existing mechanisms and the first to explore the potential of a few new formats. Our analysis focuses on participation differences among the formats and how theory and supplemental survey data can help explain some of these differences.

Positive Feedback and Path Dependence Using the Law of Large Numbers

Abstract Economists have become interested in the behavior of random processes with positive feedback but have sometimes found it difficult to introduce students to this research. Simulation of the law of large numbers with increasing amounts of feedback provides a convenient framework for such discussion and facilitates a nontechnical introduction to recent work on path dependence.