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2005 Fiscal Year Final Research Report Summary

Designing the Japanese Central Rice Market : Theoretical and Experimental Studies

Research Project

Project/Area Number 14330003
Research Category

Grant-in-Aid for Scientific Research (B)

Allocation TypeSingle-year Grants
Section一般
Research Field 経済理論
Research InstitutionShinshu University

Principal Investigator

NISHIMURA Naoko  Shinshu University, Department of Economics, Professor, 経済学部, 教授 (30218200)

Co-Investigator(Kenkyū-buntansha) SAIJO Tatsuyoshi  Osaka University, Institute of Social and Economic Research, Professor, 社会経済研究所, 教授 (20205628)
Project Period (FY) 2002 – 2005
KeywordsAuction / Experiments / Sealed bids / Institution Design
Research Abstract

One third of Japanese rice is transacted in Japanese central rice market, which is a one-sided multi-unit auction. Participants are one seller who places a sealed ask bid and buyers who submit sealed offer bids. All the offers whose average exceeds seller's ask bid are winning bids, and buyers pay at their bids. Ever since the central rice market was established, they have experienced a steady decline of rice prices. The object of this research is to examine implications of the transaction rules of rice market theoretically as well as experimentally, and propose a new market rule which is capable of reflecting demand and supply conditions more accurately.
The seller is a co-op and buyers are wholesalers. They are regulars in a market, and possess quite sufficient amount of knowledge about each other. This leads us to model the rice market as a complete information bidding game, though it is not conventional to employ such information setting for auction market analysis. In the theoretic … More al part, we show that a market has multiple Nash equilibria that covers a wide range of allocation outcomes including both competitive and monopolistic ones. It implies that even though the central market is a one-sided seller's market, it does not always generate monopoly price. Furthermore, we show that it has unique proper equilibrium generating outcomes in the close neighborhood of competitive equilibrium.
The rice market has another particular rule that gives a ceiling to the seller's ask price. When we look at a rice market as a two round sequential auction, the ask price restriction may induce the seller to place a beginning ask price relatively high in order to avoid limiting her choice in the next round.
Our experimental examinations generally support the above theoretical implications. This implies that the steady decline of rice prices, with which policy makers are concerned, may only be a logical consequence of rice market mechanism hat induces competitive equilibrium. In addition, having ask price restriction would obstruct the proper market function, in unpredictable way.
As we investigating the second-price auction in comparison with the rice market under the complete information, we have noticed that subjects may behave differently compared to the incomplete information setting, in a respect somewhat psychological. Then, it is quite questionable whether the isomorphism between the second price auction and the ascending bid auction would still be maintained under such circumstances. Exploration on this topic will be of our future research. Less

  • Research Products

    (12 results)

All 2006 2005 2004 2003 Other

All Journal Article (6 results) Book (6 results)

  • [Journal Article] "Choosing a Model out of Many Possible Alternatives : Emissions Trading as an Example,"2005

    • Author(s)
      西条 辰義
    • Journal Title

      Experimental Business Research 2

      Pages: 47-81

    • Description
      「研究成果報告書概要(和文)」より
  • [Journal Article] Choosing a Model out of Many Possible Alternatives : Emission Trading as an Example2005

    • Author(s)
      Tatsuyoshi Saijo
    • Journal Title

      Experimental Business Research v.2

      Pages: 47-81

    • Description
      「研究成果報告書概要(欧文)」より
  • [Journal Article] "How Universal is Behavior? A Four Country Comparison of Spite, and Cooperation in Voluntary Contribution Mechanisms,"2004

    • Author(s)
      西条 辰義
    • Journal Title

      Public Choice 119(3-4)(共著)

      Pages: 381-424

    • Description
      「研究成果報告書概要(和文)」より
  • [Journal Article] How Universal is Behavior? A Four Country Comparison of Spite and Cooperation in Voluntary Contribution Mechanisms2004

    • Author(s)
      Jordi Brandts, Tatsuyoshi Saijo, Arthur Schram
    • Journal Title

      Public Choice 119(3-4)

      Pages: 381-424

    • Description
      「研究成果報告書概要(欧文)」より
  • [Journal Article] Revenue Non-Equivalence between the English and the Second-Price Auctions : Experimental Evidence2003

    • Author(s)
      西村 直子
    • Journal Title

      Journal of Economic Behavior and Organization 51

      Pages: 443-458

    • Description
      「研究成果報告書概要(和文)」より
  • [Journal Article] Revenue Non-Equivalence between the English and The Second-Price Auctions : Experimental Evidence2003

    • Author(s)
      Naoko Nishimura
    • Journal Title

      Journal of Economic Behavior and Organization v.51

      Pages: 443-458

    • Description
      「研究成果報告書概要(欧文)」より
  • [Book] 市場取引の実験経済学 経済心理学のすすめ 内(子安増生, 西村和雄編)2006

    • Author(s)
      西村 直子
    • Publisher
      有斐閣(所収)(出版予定)
    • Description
      「研究成果報告書概要(和文)」より
  • [Book] Spiteful Behavior in Voluntary Contribution Mechanism Experiments, Handbook of Experimental Results 内(Charles Plott, Vernon Smith編)2006

    • Author(s)
      西条 辰義
    • Publisher
      New York : Elsevier Press,(所収)(出版予定)
    • Description
      「研究成果報告書概要(和文)」より
  • [Book] オークション理論-生きた理論を目指して 応用ゲーム理論 内(今井晴男, 岡田章編)2005

    • Author(s)
      西村 直子
    • Total Pages
      50
    • Publisher
      頸草書房(所収)
    • Description
      「研究成果報告書概要(和文)」より
  • [Book] Application of Game Theory (Haruo Imai, Akira Okada (eds.))2005

    • Author(s)
      Naoko Nishimura
    • Publisher
      Keiso Shobo
    • Description
      「研究成果報告書概要(欧文)」より
  • [Book] Invitation to Economic Psychology (Masuo Koyasu, Kazuo Nishimura (eds.))

    • Author(s)
      Naoko Nishimura
    • Publisher
      Yuhikaku (forthcoming)
    • Description
      「研究成果報告書概要(欧文)」より
  • [Book] Handbook of Experimental Results (Charles Plott, Vernon Smith (eds.))

    • Author(s)
      Tasuyoshi Saijo
    • Publisher
      New York : Elsevier Press (forthcoming)
    • Description
      「研究成果報告書概要(欧文)」より

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Published: 2007-12-13  

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