Morality, Policy, and the Brain

By Aldo Rustichini

Journal of Economic Literature, March 2018

The book Moral Tribes: Emotion, Reason, and the Gap between Us and Them, by Joshua Greene, invites the reader to give a new look at the foundation of ethics and, by implication, to policy. Its specific strength is the systematic integration of new ...

Do Risk Preferences Change? Evidence from the Great East Japan Earthquake

By Chie Hanaoka, Hitoshi Shigeoka, and Yasutora Watanabe

American Economic Journal: Applied Economics, April 2018

We investigate whether individuals' risk preferences change after experiencing a natural disaster, specifically, the 2011 Great East Japan Earthquake. Exploiting the panels of nationally representative surveys on risk preferences, we find that men who exp...

Revealed Preferences for Diamond Goods

By Sam Cosaert

American Economic Journal: Microeconomics, May 2018

When consumers care not only for the quantity but also the value of a product, it could be rational to purchase products as they become more expensive. This study provides nonparametric—revealed preference—conditions to measure consumers' marg...

Revisiting the Relationship between Competition and Price Discrimination

By Ambarish Chandra and Mara Lederman

American Economic Journal: Microeconomics, May 2018

We revisit the relationship between competition and price discrimination. Theoretically, we show that if consumers differ in terms of both their underlying willingness-to-pay and their brand loyalty, competition may increase price differences between some...

Dynamic Noisy Signaling

By Sander Heinsalu

American Economic Journal: Microeconomics, May 2018

This article studies costly signaling. The signaling effort is chosen in multiple periods and observed with noise. The signaler benefits from the belief of the market, not directly from the effort or the signal. Optimal signaling behavior in time-varying ...

Modeling Risk Aversion in Economics

[Symposium: Risk in Economics and Psychology]

By Ted O'Donoghue and Jason Somerville

Journal of Economic Perspectives, Spring 2018

To capture the risk-aversion intuition, the standard approach in economics has been to utilize the model of expected utility, in which risk aversion derives from diminishing marginal utility for wealth (or diminishing marginal utility for aggregate co...

On the Relationship between Cognitive Ability and Risk Preference

[Symposium: Risk in Economics and Psychology]

By Thomas Dohmen, Armin Falk, David Huffman, and Uwe Sunde

Journal of Economic Perspectives, Spring 2018

This paper will focus on the relationship between cognitive ability and decision-making under risk and uncertainty. Taken as a whole, this research indicates that cognitive ability is associated with risk-taking behavior in various contexts and life dom...

Are Risk Preferences Stable?

[Symposium: Risk in Economics and Psychology]

By Hannah Schildberg-Hörisch

Journal of Economic Perspectives, Spring 2018

It is ultimately an empirical question whether risk preferences are stable over time. The evidence comes from diverse strands of literature, covering the stability of risk preferences in panel data over shorter periods of time, life-cycle dynamics in ri...

Risk Preference: A View from Psychology

[Symposium: Risk in Economics and Psychology]

By Rui Mata, Renato Frey, David Richter, Jürgen Schupp, and Ralph Hertwig

Journal of Economic Perspectives, Spring 2018

Psychology offers conceptual and analytic tools that can advance the discussion on the nature of risk preference and its measurement in the behavioral sciences. We discuss the revealed and stated preference measurement traditions, which have coexisted...

Estimating Heterogeneous Consumer Preferences for Restaurants and Travel Time Using Mobile Location Data

By Susan Athey, David Blei, Robert Donnelly, Francisco Ruiz, and Tobias Schmidt

AEA Papers and Proceedings, May 2018

We estimate a model of consumer choices over restaurants using data from several thousand anonymous mobile phone users. Restaurants have latent characteristics (whose distribution may depend on restaurant observables) that affect consumers' mean utility a...

Mental Budgeting versus Relative Thinking

By Samuel Hirshman, Devin Pope, and Jihong Song

AEA Papers and Proceedings, May 2018

In many situations, mental budgeting and relative thinking predict results that are in opposing directions. We study a situation of this type and provide evidence for when the predictions of one model will dominate the other.

The Language of Discrimination: Using Experimental versus Observational Data

By Aislinn Bohren, Alex Imas, and Michael Rosenberg

AEA Papers and Proceedings, May 2018

We use experimental and observational data to examine whether people respond differently to questions posed by females versus males. We document significant differences in the language of responses, both in terms of the distribution of language utilized, ...

Will a Five-Minute Discussion Change Your Mind? A Countrywide Experiment on Voter Choice in France

By Vincent Pons

American Economic Review, June 2018

This paper provides the first estimate of the effect of door-to-door canvassing on actual electoral outcomes, via a countrywide experiment embedded in Francois Hollande's campaign in the 2012 French presidential election. While existing experiments random...

Consumer Price Search and Platform Design in Internet Commerce

By Michael Dinerstein, Liran Einav, Jonathan Levin, and Neel Sundaresan

American Economic Review, July 2018

The platform design, the process that helps potential buyers on the internet navigate toward products they may purchase, plays a critical role in reducing search frictions and determining market outcomes. We study a key trade-off associated with two impor...

Consumer Valuation of Fuel Costs and Tax Policy: Evidence from the European Car Market

By Laura Grigolon, Mathias Reynaert, and Frank Verboven

American Economic Journal: Economic Policy, August 2018

To what extent do car buyers undervalue future fuel costs, and what does this imply for tax policy? To address both questions, we show it is crucial to account for consumer mileage heterogeneity. We use product-level data for a panel of European countries...

Violence and Risk Preference: Experimental Evidence from Afghanistan: Comment

By Ferdinand M. Vieider

American Economic Review, August 2018

In this comment on Callen et al. (2014), I revisit recent evidence uncovering a "preference for certainty" in violation of dominant normative and descriptive theories of decision-making under risk. I show that the empirical findings are potentially confou...

Finance and Business Cycles: The Credit-Driven Household Demand Channel

[Symposium: Macroeconomics a Decade after the Great Recession]

By Atif Mian and Amir Sufi

Journal of Economic Perspectives, Summer 2018

What is the role of the financial sector in explaining business cycles? This question is as old as the field of macroeconomics, and an extensive body of research conducted since the Global Financial Crisis of 2008 has offered new answers. The specific ide...

Compensation and Incentives in the Workplace

[Symposium: Incentives in the Workplace]

By Edward P. Lazear

Journal of Economic Perspectives, Summer 2018

Labor is supplied because most of us must work to live. Indeed, it is called "work" in part because without compensation, the overwhelming majority of workers would not otherwise perform the tasks. The theme of this essay is that incentives affect behavio...

The Effect of Terrorism on Employment and Consumer Sentiment: Evidence from Successful and Failed Terror Attacks

By Abel Brodeur

American Economic Journal: Applied Economics, October 2018

This paper examines the economic consequences of terror attacks by exploiting the inherent randomness in the success or failure of terror attacks. The findings suggest that successful attacks, in comparison to failed attacks, reduce the number of jobs and...

Diabetes and Diet: Purchasing Behavior Change in Response to Health Information

By Emily Oster

American Economic Journal: Applied Economics, October 2018

Individuals with obesity and related conditions are often reluctant to change their diet. Evaluating the details of this reluctance is hampered by limited data. I use household scanner data to estimate food purchase response to a diagnosis of diabetes. I ...