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Field experiments were conducted with farmers in the Limarí Valley of Chile to test extant theory on right-to-choose auctions. Water volumes that differed by reservoir source and time of availability were offered for sale by the research team. The auctions were supplemented by protocols to elicit risk and time preferences of bidders. We find that the right-to-choose auctions raise significantly more revenue than the benchmark sequential auction. Risk attitudes explain a substantial amount of the difference in bidding between auction institutions, consonant with received theory. The auction bidding revealed distinct preferences for water types, which has implications for market re-design.

Changes in allocation of federal grazing permits to ranchers can impact not only local ranchers but the entire county economy itself. Regional impacts of changing grazing rights and grazing fees are measured by linking cattle production through a linear programming framework with a county level social accounting matrix (SAM) model.

In settings characterized by imperfect information about an underlying state of nature, but where inferences are made sequentially and are publicly observable, decisions may yield a "cascade" in which everyone herds on a single choice. While cascades potentially play a role in a variety of settings, from technology adoption to social processes such as mate selection, understanding cascade phenomena is imperative for financial markets. Previous empirical efforts studying cascade formation have used both naturally occurring data and laboratory experiments. In this paper, we combine one of the attractive elements of each line of research-observation of market professionals in a controlled environment-to push the investigation of cascade behavior into several new directions. Numerous empirical insights are obtained; perhaps most importantly, we find that market professionals behave quite differently than a control group of student subjects. In particular, market professionals, more so than students, base their decisions on the "quality" of the public signal, leading them to be more likely to disregard "bad" signals. And, unlike in the case with students, for market professionals, the propensity to be Bayesian does not differ significantly across the gain and loss domains. These results have important implications in both a positive and normative sense.

In settings where there is imperfect information about an underlying state of nature, but where inferences are made sequentially and are publicly observable, information cascades can lead to rational herding. Cascade phenomena may be seen in a variety of areas including technology adoption, financial market behavior, as well as in social processes such as mate selection or fads and fashions. Theories of rational herding have found a natural testing ground in experimental environments since the character of private and public information can be readily controlled. In previous experimental studies, behavior consistent with Bayesian benchmarks has been observed in simple contexts, but there are substantial reductions in experimental environments that introduce relevant complications such as costly information. In this paper we make use of a unique subject pool, that of financial market professionals from the floor of the Chicago Board of Trade, to investigate the role of market experience on herding behavior. We find that market professionals behave differently than a control group of college student subjects. In particular the Bayesian behavior of those with market experience does not differ significantly across the gain and loss domains. Cascade formation also differs across the subject pools with market professionals entering fewer reverse cascades.

An equilibrium solution is developed for a common-agency game that is used to study the structure of regulatory bureaucracy. Contrary to existing results, this equilibrium maintains powerful incentives for the agent. An experiment is conducted to test the competing hypotheses. The implications of common-agency on reciprocity are also examined.

This paper applies a multi-tasking model of moral hazard to study the delegation of regulatory authority for health and environmental risks. The model characterizes the conditions under which single and multiple bureaucratic agencies are optimal, and relates these findings to discussions of appropriate regulation of agricultural biotechnology