American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Heterogeneity and Aggregation RichardBlundell Thomas M.Stoker 347 391 This survey covers recent solutions to aggregation problems in three application areas, consumer demand analysis, consumption growth and wealth, and labor participation and wages. Each area involves treatment of heterogeneity and nonlinearity at the individual level. Three types of heterogeneity are highlighted: heterogeneity in individual tastes, heterogeneity in income and wealth risks and heterogeneity in market participation. Work in each area is illustrated using results from empirical data. The overall aim is to show how concerns faced by empirical researchers regarding aggregation can be addressed. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=1&issue_date=June 2005 10.1257/0022051054661486 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Interdependent Preferences and Reciprocity JoelSobel 392 436 Experiments, ethnography, and introspection provide evidence economic agents do not act to maximize their narrowly defined self interest. Expanding the domain of preferences to include the utility of others provides a coherent way to extend rational choice theory.There are two approaches for including extended or social preferences in strategic models. One posits that agents have extended preferences, but maintains the conventional assumption that these preferences are stable. Prominent examples of this approach permit agents to exhibit concern for status, inequality, and social welfare. The other approach permits the strategic context to determine the nature of individual preferences. Context-dependent preferences can capture the possibility that agents are motivated in part by reciprocity. They may sacrifice personal consumption in order to lower the utility of unkind agents or to raise the utility of kind agents.This paper surveys the evidence in favor of social preferences and describes the implications of the leading theoretical models of extended preferences. It presents behavioral assumptions that characterize different types of social preferences. It investigates the extent to which social preferences may arise as the limit of evolutionary processes. It discusses the relationship between norms of reciprocity and social preferences in repeated interactions. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=2&issue_date=June 2005 10.1257/0022051054661530 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Complementarities and Games: New Developments XavierVives 437 479 The theory of monotone comparative statics and supermodular games is presented as the appropriate tool to model complementarities. The approach, which has not yet been fully incorporated into the standard toolbox of researchers, makes the analysis intuitive and simple, helps in deriving new results and in casting new light on old ones. The paper takes stock of recent contributions and develops applications to industrial organization (oligopoly, R&D, and dynamics), finance (currency and banking crisis) and macroeconomics (adjustment and menu costs). Particular attention is devoted to Markov games and to games of incomplete information (including global games). http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=3&issue_date=June 2005 10.1257/0022051054661558 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Getting the Properties Right to Secure Property Rights: Dixit's Lawlessness and Economics James E.Rauch 480 487 This is a review article of Lawlessness and Economics: Alternative Modes of Governance (Princeton University Press 2004) by Avinash K. Dixit. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=4&issue_date=June 2005 10.1257/0022051054661503 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Foundations of Human Sociality: A Review Essay LarrySamuelson 488 497 This is a review article of Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies (Oxford University Press 2004) edited by Joseph Henrich, Robert Boyd, Samuel Bowles, Colin Camerer, Ernst Fehr, and Herbert Gintis. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=5&issue_date=June 2005 10.1257/0022051054661549 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Book Reviews 498 529 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=6&issue_date=June 2005 10.1257/0022051054661521 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article Annotated Listing of New Books 530 639 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=7&issue_date=June 2005 10.1257/0022051054661495 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 2 June 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=2&issue_date=June 2005 Journal Article JEL Classification System 640 651 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=2&article=8&issue_date=June 2005 10.1257/0022051054661512