University of Toronto
This dissertation consists of three essays on applied economics.
In the first essay, I provide an empirical assessment of competing auction theory. Specifically, it uses an extensive new data set containing detailed information about bids placed on eBay computer CPU auctions to explore bidding strategies in the presence of competing auctions. The evidence indicates that a significant proportion of bidders bid across several competing auctions at the same time and that bidders tend to submit bids on auctions with the lowest standing bid. We also find that winning bidders who bid across competing auctions pay lower prices than winning bidders who do not cross-bid. These findings jointly amount to the first evidence lending empirical support to competing auction theory.
In the second essay, I consider the convergence properties of behavior under a comparative negligence rule (CN) and under a rule of negligence with contributory negligence (NCN), assuming bilateral care with three care levels. Using an evolutionary model, we show that CN reduces the proportion of the population using low care more rapidly than does NCN. However NCN increases the proportion of the population using high (efficient) care more rapidly than does CN. As a result, the mean care level increases more rapidly and the mean social cost falls more rapidly under CN than under NCN.
In the third essay, I provide a model for rational legal decision-making by considering the consistency of social decision-making on resource allocations. In the model, legal decision-making is not based on individual utilities. The purpose of law is described by a subjective social welfare function, with a social value judgment and an attitude towards distributional inequality as its parameters. Thus a legal decision-making always involves a social value judgment. Social efficiency can be different from the maximization of social wealth. In tort law, the determination of the efficient precaution level and the award of compensation depend on the social value judgment, and the compensation scheme implicitly transfers wealth from the less socially valued party to the more socially valued party. The model also provides another explanation for the award of punitive damage.
I am deeply indebted to my supervisor Michael Peters, committee members Don Dewees and Robert McMillan. Their generous help, stimulating suggestions and constant encouragements helped me in all the time of research for and writing of this thesis. My gratitude to them cannot be expressed by words.
I could not have survived the PHD study without the understanding and the support by my wife Fang Xiao. I would like to give her special thanks.
I also thank Mohr Siebeck for authorizing me to include the paper published in JITE in my dissertation.