Libertarian Paternalism

By Richard H. Thaler and Cass R. Sunstein

American Economic Review, May 2003

Competitive Bank Liability Design

By Saki Bigio, Pierre-Olivier Weill, and Diego Zúñiga

AEA Papers and Proceedings, May 2026

We study how competitive banks design liabilities that function as money in an economy with asymmetric information. Assets differ in risk exposure, and sufficiently risky assets cannot circulate in decentralized trade. Banks commit to state-contingent pay...

Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes

By Ted O'Donoghue and Matthew Rabin

American Economic Review, May 2003

Institutional Design for Environmental Acts

By Louise Guillouet and David Martimort

AEA Papers and Proceedings, May 2026

Environmental decisions often involve irreversibility and uncertainty. We develop a dynamic model in which actions yield flow benefits, but, once an unknown tipping point is crossed, the accumulated stock of past actions raises the risk of irreversible ca...

The Informational Role of Emission Markets: Prices versus Quantities with Dispersed Information about Externalities

By Derek Lemoine

AEA Papers and Proceedings, May 2026

I study asymmetric information about the social cost of an externality, as opposed to asymmetric information about private costs of abatement. I show that quantity regulation with bankable permits has an informational advantage because the permit market a...

Decision Making with Naive Advice

By Andrew Schotter

American Economic Review, May 2003

A New Approach to Risk-Spreading via Coverage-Expansion Subsidies

By John Holahan, Len M. Nichols, Linda J. Blumberg, and Yu-Chu Shen

American Economic Review, May 2003

The persistently large number of uninsured, roughly 40 million per year since 1993, continues to elicit bipartisan policy interest. Coverage-expansion proposals without mandates, by far the most common since the defeat of the Clinton plan, must address ri...

Thanatology and Economics: The Behavioral Economics of Death

By Joel Slemrod

American Economic Review, May 2003

Average Debt and Equity Returns: Puzzling?

By Ellen R. McGrattan and Edward C. Prescott

American Economic Review, May 2003

The Impact of Bankruptcy on Airline Service Levels

By Severin Borenstein and Nancy L. Rose

American Economic Review, May 2003

The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing

By Lori D. Snyder, Nolan H. Miller, and Robert N. Stavins

American Economic Review, May 2003

Report of the Committee on the Status of Women in the Economics Profession

American Economic Review, May 2003

Optimal Pricing Mechanisms with Unknown Demand

By Ilya Segal

American Economic Review, June 2003

The standard profit-maximizing multiunit auction intersects the submitted demand curve with a preset reservation supply curve, which is determined using the distribution from which the buyers' valuations are drawn. However, when this distribution is unkno...

What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game

By James Andreoni, Marco Castillo, and Ragan Petrie

American Economic Review, June 2003

The ultimatum game, by its all-or-nothing nature, makes it difficult to discern what kind of preferences may be generating choices. We explore a game that convexifies the decisions, allowing us a better look at the indifference curves of bargainers while ...

A Theory of Defensive Skill-Biased Innovation and Globalization

By Mathias Thoenig and Thierry Verdier

American Economic Review, June 2003

This paper considers a dynamic model of innovations in which firms can endogenously bias the direction of technological change. Both in a North-North and North-South context, we show that, when globalization triggers an increased threat of technological l...

School Choice: A Mechanism Design Approach

By Atila Abdulkadiroğlu and Tayfun Sönmez

American Economic Review, June 2003

A central issue in school choice is the design of a student assignment mechanism. Education literature provides guidance for the design of such mechanisms but does not offer specific mechanisms. The flaws in the existing school choice plans result in appe...

Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?

By James Andreoni and A. Abigail Payne

American Economic Review, June 2003

Economists have long observed that crowding out of government grants to private charities is incomplete. The accepted belief is that givers treat the grants as imperfect substitutes for private giving. We theoretically and empirically investigate a second...

Forward and Backward Intergenerational Goods: Why Is Social Security Good for the Environment?

By Antonio Rangel

American Economic Review, June 2003

This paper studies the ability of nonmarket institutions to invest optimally in forward intergenerational goods (FIGs), such as education and the environment, when agents are selfish or exhibit paternalistic altruism. We show that backward intergeneration...

Relational Incentive Contracts

By Jonathan Levin

American Economic Review, June 2003

Standard incentive theory models provide a rich framework for studying informational problems but assume that contracts can be perfectly enforced. This paper studies the design of self-enforced relational contracts. I show that optimal contracts often can...

Verifying the Solution from a Nonlinear Solver: A Case Study

By B. D. McCullough and H. D. Vinod

American Economic Review, June 2003