Hybrid Auctions II: Experimental Evidence

In this paper we report the results of an experiment designed to examine the properties of a hybrid auction - a Dutch-Vickrey auction, that combines a sealed bid …rst-price auction with a sealed bid second-price auction. This auction mechanism shares some important features with that used in the sale of the companies constituted through the partial division of the Telebras System - the government-owned Telecom holding in Brazil. We designed an experiment where individuals participate in a sequence of independent …rst-price auctions followed by a sequence of hybrid auctions. Several conclusions emerged from this experimental study. First, ex-post e¢ciency was achieved overwhelmingly by the hybrid auctions. Secondly, although overbidding (with respect to the risk-neutral Bayesian Nash equilibrium) was a regular feature of participants’ bidding behavior in the …rst-price auctions — as it is commonly reported in most experimental studies of …rst-price auctions, it was less frequent in the hybrid auctions. By calibrating the results to allow for risk-averse behavior we were able to account for a signi…cant part of the overbidding. Finally, we compared the revenue generated by the hybrid auction with that generated by a standard …rst-price sealed bid auction and the results were ambiguous.

Intervenções governamentais no mercado de crédito bancário brasileiro: bancos públicos e bancos privados varejistas competem entre si?

O presente estudo investiga se há competição entre os bancos públicos e privados varejistas na presença de intervenções governamentais impostas ao mercado de crédito bancário brasileiro, tais como o aumento da oferta de crédito via bancos públicos e a campanha de redução dos spreads bancários capitaneada pelos bancos governamentais. Os resultados encontrados no modelo Diff-in-Diff indicam que os bancos públicos apresentam ritmo de crescimento do estoque de crédito, nível de aprovisionamento, rentabilidade da carteira de crédito, retorno operacional, bem como custo do funding superiores aos bancos privados após o tratamento. Ademais, há evidências de mudanças na estratégia de alocação de recursos dos bancos privados em relação aos pares públicos, tendo as instituições bancárias privadas preferido aumentar a participação de ativos líquidos no balanço em detrimento de operações de crédito após o tratamento. Esses resultados sugerem que os bancos privados não competem com os bancos públicos no segmento de varejo quando estes adotam estratégias de alocação de recursos difusas à maximização do lucro esperado para um dado risco.

A note on Brazilian financial regulation and governance

The question posed by Theme 4 of this workshop is indeed a very broad one and would demand a thorough research on the topics involved. I am afraid I did not have the proper time to think it over and I would not be able to provide a wide ranging answer to this question. Thus, I will be selective and I will present the following issues that need to be addressed to support Brazilian development: i) competition among banks; ii) high rate of interest on liquidity; iii) approval by the Congress of a Complementary Law to regulate the financial sector as required by the 1988 Brazilian Constitution; iv) exploitation of workers through the governance of the Job Time Guarantee Fund (FGTS) and iv) state-owned versus government owned enterprises.

Chasing patents

We examine the problem faced by a company that wishes to purchase patents in the hands of two di¤erent patent owners. Complementarity of these patents in the production process of the company is a prime e¢ciency reason for them being owned (or licenced) by the company. We show that this very same complementarity can lead to patent owners behaving strategically in bargaining, and delaying their sale to the company. When the company is highly leveraged, such ine¢cient delay is limited. Comparative statics results are also obtained. Relevant applications include assembly of patents for drug treatments from the human genome, and land assembly.

Sustained growth, government expenditure and inflation

We construct and simulate a theoretical model in order to explain particular historical experiences in which inflation acceleration apparently helped to spur a period of economic growth. Government financed expenditures affect positively the produtivity growth in this model so that the distortionary effect of inflation tax is compensated by the productive effect of public expenditures. We show that for some interval of money creation rates there is an equilibrium where money is valued and where steady state physica1 capital grows with inflation. It is a1so shown that zero inflation and growth maximization are never the optimal policies.

The risk-properties of human capital and the design of government policies

Whether human capital increases or decreases wage uncertainty is an open question from an empirical standpoint. Yet, most policy prescriptions regarding human capital formation are based on models that impose riskiness on this type of investment. In a two period and finite type optimal income taxation problem we derive prescriptions that are robust to the risk characteristics of human capital: savings should be discouraged, human capital investments encouraged and both types of investment driven to an efficient level from an aggregate perspective. These prescriptions are also robust to the assumptions regarding what choices are observed, despite policy instruments being not.

Financial integration and public financial institutions

This article highlights the problems associated with the existence of financiai institutions owned by a State which is a member of a federation. We show that these financiai institutions allow the States to transfer deficits to the federal government. This possibility creates incentives to higher deficits at State and federal leveis, implying an inefficiently high inflation rate. The main policy implication is that stabilization policies are more difficult to be implemented in countries such as Brazil, and Argentina which allow the members of the federation to own financiai institutions. A second policy implication is that Economic Blocks such as the European Community or Mercosur should not allow regional central banks if they create a monetary authority to help the members in financiai difficulty.

Inflationary bias and state owned financial institutions

This article explains why the existence of state owned financial institutions makes it more difficult for a country to balance its budget. We show that states can use their financiaI institutions to transfer their deficits to the federal govemment. As a result, there is a bias towards Iarge deficits and high inflation rates. Our model also predicts that state owned financiaI institutions should underperform the market, mainly because they concentrate their portfolios on non-performing loans to their own shareholders, that is, the states. Brazil and Argentina are two countries with a history of high inflation that confirm our predictions .

A green revolution in Mozambique: a study about the government possibilities to launch a sustainable green revolution

The present study is focused on the analysis of the political, economical and social factors that may interfere with the possibility of a Green Revolution as a solution for Mozambique to reach self-sufficiency and to reduce poverty. In order to perform such analysis, the study analyzes the consequences of the decolonization process in Mozambique focusing that the independence process in Mozambique did not create non-colonial models for the Agriculture Sector. Later on, the study tries to understand the impact of HIV/AIDS and Malaria on the labor force. By then, it explores the concepts of the Green Revolution and its successful history in India. At the end, it tries to evaluate if a Green Revolution is possible in Africa, especially in Mozambique, first identifying the factors, which characterized the Green Revolution in India, and trying to link those factors with the reality of Mozambique. The report is structured as followed; Chapter 2, ¿The decolonization process and its impacts on the agriculture sector¿. It gives information about the decolonization process, and explores its consequences. Chapter 3, ¿The Impacts of HIV/AIDS and Malaria on the Labor Force¿. It analyzes the impact of those diseases in the labor force. Chapter 4 ¿The Green Revolution and the Agriculture Sector¿, explores the concepts of Green Revolution, its success in India and its history in Mozambique. Chapter 5, finally, centers on conclusions, findings and recommendations.

Fatores relevantes na construção de processos government-to-government no Banco Central do Brasil

This dissertation seeks to recognize the factors, which are relevant to the construction of the processes Government-to-Government (G2G), and how these factors influence the success of those processes. For this research, two existing cases in Banco Central do Brasil (Bacen) were used: i) the Banco Central do Brasil (BACEN) X Senado Federal case; and the Bacen x Poder Judiciário case. The framework of this dissertation is based on the methodology of multiple study cases described by Robert Yin (2001). This work analyzed separately each of the cases and compared the results obtained in each analysis. In this way, this research aimed at analyzing the reasons that led these cases to gain such distinct outcomes, despite the existing potential benefits in each one of them. The obtained results suggest that three factors influence the success of G2G processes in a relevant way: computational safety; the culture of the organizations involved; and the capacitation of people involved. Each of these factors, according to what results showed, bring a set of considerations which should be observed by the public administrator in relation to the strategies of implementation of G2G processes.

A Evolução e Consolidação das Práticas de Governança Corporativa no Banco do Brasil S.A. entre 1996 e 2006

The purpose of this dissertation is to identify the main historical and institutional facts that have led to the present corporate governance policy adopted by Banco do Brasil S.A. (BB). The good practices of corporate governance aim to increase corporate value and facilitate the funding of capital and contribute to company¿s duration over the time. Besides, ensure to the shareholders some governance principles such as disclosure", "compliance", "accountability", "fairness" and ¿corporate responsability¿ By the time BB has been shown its concern about disclosure especially for its close relationship with principal shareholder. ¿ the Brazilian Government, other equity partners and the Brazilian society. Banco do Brasil was founded in 1808 by the Portuguese emperor Dom João VI and today is the oldest bank operating in the local market. BB also was the first company listed on Brazilian stock exchange since 1906. In 1996, after some net losses, the Brazilian Government raised the bank¿s authorized capital in R$ 8 billion. This fact established the first attempts to develop bank¿s corporate governance through the years. Banco do Brasil currently has more than 24.4 million customers, served by a network of 15,113 points of service with R$ 296.4 billion in total assets2. The purpose of this work is to demonstrate the principal measures adopted by Banco do Brasil to reach the top level of corporate governance in the Brazilian stock exchange ¿ the New Market of Bovespa. This top position was reached in June 2006. Banco do Brasil was the first state owned company to reach this level of governance in Brazil. This dissertation was based on Yin's taxonomy methodology as a single case study. This research has used documents and file records as sources of evidence, including longitudinally research to demonstrate the evolution facts through time."

Modelo para avaliação do custo burocrático do FCVS (Fundo de Compensação de Variações Salariais) : um estudo de caso

In 1964, year of the military coup, the Brazilian government established a housing finance system with the intention of reducing the housing shortage that had been going on for decades. In order to reach this goal, the government created the Housing Finance System (acronym in Portuguese ¿ SFH), a set of rules which intended to set up a regulated market through standardized contracts and compulsory sources of funds. The system survived for some time, due to the state control of prices and salaries in the authoritarian regime. However, the increasing inflationary pressure obliged the government to adopt a populist subsidy policy, which left as a consequence outstanding balances at the end of the contracts that very often exceeded the value of the financed units. The solution adopted was to create a fund to settle these residual balances. Such fund should be capitalized by the government and by compulsory contributions from borrowers and financial institutions. Since the government did not make such contributions, the debt of this fund increased on a yearly basis, reaching around 3,5 % of Brazil¿s GDP in December 31, 2006. Due to the decline of private investments in the housing finance system, this debt concentrated mostly on public and state-owned companies, government agencies and public funds. The outcome of this policy was the Salary Variations Compensation Fund (acronym in Portuguese ¿ FCVS), which has a negative net equity of 76 billion reais and costs 100 million reais per year to be managed, and whose main creditor is the Federal Government itself.

Mensuração de Capacidade Tecnológica no Contexto de Industrialização Recente: Uma Breve Reflexão Crítica Sobre Taxonomias e Evidências de Pesquisas Recentes

This dissertation aims at examining empirical evidences obtained in the light of taxonomies and strategies for measuring firms technological capabilities and innovation in the context of developing countries, motivated by the fact that debates and studies directed to innovation has been intensified, for the last thirty years, by the recognition of its vital and growing importance to the technological, economic, competitive and industrial development of firms and countries. Two main tendencies can be identified on this debate. At one side, it¿s the literature related to the developed countries logic, whose companies are, in majority, positioned at the technological frontier, characterized by the domain of innovative advanced capabilities, directed to its sustaining, deepening and renewal. At the other side, there are the perspectives directed to the developing countries reality, where there is a prevalence of companies with deficiency of resources, still in process of accumulating basic and intermediate technological capabilities, with characteristics and technological development trajectories distinct or even reverse from those of developing countries. From this last tradition of studies, the measuring approaches based in C&T indicators and in types and levels of technological capabilities stand out. The first offers a macro level, aggregated perspective, through the analysis of a representative sample of firms, seeking to the generation of internationally comparable data, without addressing the intraorganizational specificities and nuances of the paths of technological accumulation developed by the firms, using, mostly, R&D statistics, patents, individual qualifications, indicators that carry their own limitations. On the other hand, studies that examine types and levels of technological capabilities are scarce, usually directed to a small sample of firms and/or industrial sectors. Therefore, in the light of the focus and potentialities of each of the perspectives, this scenario exposes a lack of studies that examine, in a parallel and complementary way, both types of strategies, seeking to offer more realistic, consistent and concrete information about the technological reality of developing countries. In order to close this gap, this dissertation examines (i) strategies of innovation measurement in the contexts of developing countries based on traditional approaches and C&T indicators, represented by four innovation surveys - ECIB, PINTEC, PAEP and EAI, and, (ii) from the perspective of technological capabilities as an intrinsic resource of the firm, the development of which occurs in a cumulative way and based on learning, presents and extracts generalizations of empirical applications of a metric that identifies types and levels of technological capabilities, through a dynamic and intra-firm perspective. The exam of the empirical evidences of the two approaches showed what each one of the metrics are capable to offer and the way they can contribute to the generation of information that reflect the technological development of specific industrial sectors in developing countries. In spite of the fact that the focus, objective, perspective, inclusion, scope and lens used are substantially distinct, generating, on a side, an aggregated view, and of other, an intra-sector, intra-organizational and specific view, the results suggest that the use of one doesn't implicate discarding or abdicating the other. On the contrary, using both in a complementary way means the generation of more complete, rich and relevant evidences and analysis that offer a realistic notion of the industrial development and contribute in a more direct way to the design of corporate strategies and government policies, including those directed to the macro level aspects just as those more specific and focused, designed to increment and foment firms in-house innovative efforts.

Participação nos lucros ou resultados nas empresas estatais federais: questões emergentes, problemas e desafios

Esta dissertação é um estudo de caso exploratório sobre a atuação do Departamento de Coordenação e Governança das Empresas Estatais (DEST), vinculado à Secretaria-Executiva do Ministério do Planejamento, Orçamento e Gestão, na análise e na aprovação das propostas de participação nos lucros ou resultados (PLR) dos empregados das empresas estatais em que a União é acionista majoritária. Quatro empresas estatais que apresentaram propostas de PLR para o exercício de 2008 foram selecionadas qualitativamente. As informações coletadas a partir das propostas das empresas, de documentos oficiais do DEST se manifestando sobre o assunto, do marco legal existente e das entrevistas com representantes do órgão foram analisadas criticamente com base na teoria da agência, da literatura sobre mensuração de desempenho no setor público, das reformas administrativas no Brasil e dos pressupostos do novo institucionalismo. Com isso, foi possível: (i) analisar o DEST e o marco legal da PLR enquanto as instituições intermediando o processo entre as propostas e as aprovações; (ii) caracterizar as preferências do DEST em relação aos programas de PLR; (iii) caracterizar as propostas de PLR das empresas estatais; (iv) caracterizar os resultados que as instituições em consideração estão produzindo; (v) analisar os fatores limitantes e/ou facilitadores para o funcionamento das instituições; e (vi) levantar as percepções de ex- e atuais envolvidos no processo de análise e aprovação das propostas no DEST acerca da PLR nas empresas estatais enquanto instrumento de incentivo à produtividade. Como resultado, verificou-se (i) que as aprovações do DEST refletem apenas parcialmente as preferências do órgão com relação ao formato dos programas e (ii) que a atuação do DEST varia de intensidade entre os eixos que compõem os programas (seleção de indicadores, estabelecimento de metas, definição do montante e forma de sua distribuição).