The double auction trading institution (DA) has been highly efficient across diverse marginal-cost market structures, whether human subjects or "zero-intelligence" robots populated those markets. Accordingly, many researchers suspect that DA performance transcends market structure and agent strategy. But we show that (1) large avoidable costs undermine the efficiency and stability of human subject DAs, and (2) these low human efficiencies are simultaneously well above zero-intelligence efficiencies. Our results dramatically illustrate the potential havoc wrought by highly competitive institutions when they must cope with nonconvex technologies.

We study a dynamic model of labor migration in which moving costs decrease with the number of migrants already settled in the destination. This assumption is supported by sociological studies of migrant networks. With endogenous moving costs migration occurs gradually over time. Once it starts it develops momentum and migratory flows may increase even as wage differentials narrow. In addition migration tends to follow geographical channels and low-moving-cost individuals migrate first. These patterns are consistent with historical evidence from the Great Black Migration of 1915-1960 [in the United States] much of which cannot be reconciled with existing migration models. (EXCERPT)

Jean-Paul Chavas, Matthew T. Holt, Economic Behavior Under Uncertainty: A Joint Analysis of Risk Preferences and Technology, The Review of Economics and Statistics, Vol. 78, No. 2 (May, 1996), pp. 329-335

The authors test the hypothesis that, when their compensation is linked to relative performance, managers of investment portfolios likely to end up as 'losers' will manipulate fund risk differently than those managing portfolios likely to be 'winners.' An empirical investigation of the performance of 334 growth-oriented mutual funds during 1976 to 1991 demonstrates that mid-year losers tend to increase fund volatility in the latter part of an annual assessment period to a greater extent than mid-year winners. Furthermore, the authors show that this effect became stronger as industry growth and investor awareness of fund performance increased over time.

The double auction trading institution has been highly efficient across diverse marginal-cost market structures, whether human subjects or 'zero-intelligence' robots populated those markets. Accordingly, many researchers suspect that double auction performance transcends market structure and agent strategy. But the authors show that large avoidable costs undermine the efficiency and stability of human subject double auctions and these low human efficiencies are simultaneously well above zero-intelligence efficiencies. Their results dramatically illustrate the potential havoc wrought by highly competitive institutions when they must cope with nonconvex technologies.

We test the hypothesis that when their compensation is linked to relative performance, managers of investment portfolios likely to end up as will manipulate fund risk differently than those managing portfolios likely to be An empirical investigation of the performance of 334 growth-oriented mutual funds during 1976 to 1991 demonstrates that mid-year losers tend to increase fund volatility in the latter part of an annual assessment period to a greater extent than mid-year winners. Further, we show that this effect became stronger as industry growth and investor awareness of fund performance increased over time.

We test the hypothesis that when their compensation is linked to relative performance, managers of investment portfolios likely to end up as “losers” will manipulate fund risk differently than those managing portfolios likely to be “winners.” An empirical investigation of the performance of 334 growth‐oriented mutual funds during 1976 to 1991 demonstrates that mid‐year losers tend to increase fund volatility in the latter part of an annual assessment period to a greater extent than mid‐year winners. Furthermore, we show that this effect became stronger as industry growth and investor awareness of fund performance increased over time.