Transaction Costs and the Collection of Information: Presale Measurement on Private Timber Sales

  title={Transaction Costs and the Collection of Information: Presale Measurement on Private Timber Sales},
  author={Keith B. Leffler and Randal R. Rucker and Ian A. Munn},
  journal={Journal of Law Economics \& Organization},
Measurement efforts to reduce the uncertainty concerning the attributes of heterogeneous goods may simply redistribute wealth and result in social waste. Individuals bearing the cost of such distributional measurement have incentives to develop buying and selling practices that limit such measurement. We examine, both theoretically and empirically, the determinants of the level of distributional measurement efforts in a competitive auction framework. The empirical application, which uses a… 
Transaction Costs and Cattle Marketing: The Information Content of Seller‐Provided Presale Data at Bull Auctions
At sales out breeding bulls, prospective buyers have strong incentives to undertake presale measurement activities. To reduce these transaction costs, sellers often provide information on sale bulls.
What is the cost of low participation in French timber auctions?
How much is the standing timber from public forests worth? To estimate the value of a timber lot, we adopt the transaction evidence appraisal approach using data from timber auctions in Lorraine
Per-unit bidding rules and buyer under-performance in natural resource sales
In this article, we examine the role of per-unit bidding rules on firm-level contractual performance. In particular, we test the hypothesis that buyers will act on incentives to under-perform when
Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales
When bidders anticipate an opportunity for resale trade, the value of winning an auction is determined in part by the option values of buying and selling in the secondary market. One implication is
The Effects of Neighboring Parties on the Value of Rights: Evidence from Timber Harvests
We study the effect that neighboring parties have on the economic rents from owing the rights to a natural resource. Our application uses winning bid prices from state timber auctions in three
Transaction Costs and Organizational Choice: Modeling Governance in Offshore Drilling
This research examines oil company decisions to vertically integrate into the drilling function using a transaction cost economics framework. Risk preference is also investigated as an explanation of
Shadow pricing diversity in U. S. national forests
Abstract Tobit estimation of the market value of timber sales in national forests of North Carolina demonstrates the important effect of stand diversity on the formulation of bid prices for
Private ordering, collective action, and the self-enforcing range of contracts
Contract enforcement is acknowledged as a major issue in Law and in Economics. Contrasting substitution and complementary perspectives with respect to the role of private vs. public enforcement
The Division of Labor in Distribution and Industry Growth
Abstract This article develops a theory of vertical integration of the distribution function by taking into account distribution and transaction costs. It investigates the implications for


Transactions Costs and the Efficient Organization of Production: A Study of Timber-Harvesting Contracts
A transaction costs framework is developed to explain the choice between lump-sum and per unit payment provisions in private timber-harvesting contracts. Predictions about which contract type
Auction Markets, Bid Preparation Costs and Entrance Fees
A transaction costs framework is developed to explain the choice between lump-sum and per unit payment provisions in private timber-harvesting contracts. Predictions about which contract type
Empirical Research in Transaction Cost Economics: A Review and Assessment
This paper summarizes and assesses the growing body of empirical research in transaction cost economics (TCE). Originally an explanation for the scale and scope of the firm, TCE is now used to study
Measurement Cost and the Organization of Markets
  • Y. Barzel
  • Economics
    The Journal of Law and Economics
  • 1982
PEOPLE will exchange only if they perceive what they get to be more valuable than what they give. To form such perceptions, the attributes of the traded items have to be measured. Some measurements
Contract duration and relationship-specific investments: Empirical evidence from coal markets
This paper examines empirically the importance of relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities, using data for 277
A common value auction model with endogenous entry and information acquisition
SummaryMuch of the auction literature assumes both a fixed number of bidders and a fixed information setting. This sidesteps the important and often costly decisions a potential bidder must make
Rational Expectations, Information Acquisition, and Competitive Bidding
Most rational expectations market equilibrium models are not models of price formation, and naive mechanisms leading to such equilibria can be severely manipulable. In this paper, a bidding model is
Mitigating Contractual Hazards: Unilateral Options and Contract Length
In this article we consider the ways in which the desire for efficient, low-cost adaptation to change influences the tradeoff between the design and duration of long-term contractual relationships.
A Bidding Model of Perfect Competition
I demonstrate in this paper that price formation via the procedure of competitive bidding satisfies a version of the law of large numbers, in both the probabilistic sense and the economic sense. That
Sealed Bids, Sunk Costs, and the Process of Competition
How do firms recover precontract costs? For example, suppose 10 firms compete in a sealed-bid auction for the right to explore and develop an offshore oil field. Each spends $500,000 to estimate the