Learning by Driving: Productivity Improvements by New York City Taxi Drivers

By Kareem Haggag, Brian McManus, and Giovanni Paci

American Economic Journal: Applied Economics, January 2017

We study learning by doing by New York City taxi drivers, who have substantial discretion over their driving strategies and receive compensation closely tied to their success in finding customers. In addition to documenting learning overall by these entre...

Can Social Information Affect What Job You Choose and Keep?

By Lucas C. Coffman, Clayton R. Featherstone, and Judd B. Kessler

American Economic Journal: Applied Economics, January 2017

We show that the provision of social information influences a high-stakes decision and this influence persists over time. In a field experiment involving thousands of admits to Teach For America, those told about the previous year's matriculation rate are...

Beeps

By Jeffrey C. Ely

American Economic Review, January 2017

I introduce and study dynamic persuasion mechanisms. A principal privately observes the evolution of a stochastic process and sends messages over time to an agent. The agent takes actions in each period based on her beliefs about the state of the process ...

Does It Pay to Know Prices in Health Care?

By Ethan M. J. Lieber

American Economic Journal: Economic Policy, February 2017

Consumers rarely know the price of medical care before they consume it. I use variation in the timing of access to a new source of price information to show how access to and search for price information leads consumers to pay significantly less for care....

Are Information Disclosures Effective? Evidence from the Credit Card Market

By Enrique Seira, Alan Elizondo, and Eduardo Laguna-Müggenburg

American Economic Journal: Economic Policy, February 2017

Consumer protection in financial markets in the form of information disclosure is high on government agendas, even though there is little evidence of its effectiveness. We implement a randomized control trial in the credit card market for a large populati...

Cultural Proximity and Loan Outcomes

By Raymond Fisman, Daniel Paravisini, and Vikrant Vig

American Economic Review, February 2017

We present evidence that cultural proximity (shared codes, beliefs, ethnicity) between lenders and borrowers increases the quantity of credit and reduces default. We identify in-group lending using dyadic data on religion and caste for officers and borrow...

Evidence Games: Truth and Commitment

By Sergiu Hart, Ilan Kremer, and Motty Perry

American Economic Review, March 2017

An evidence game is a strategic disclosure game in which an informed agent who has some pieces of verifiable evidence decides which ones to disclose to an uninformed principal who chooses a reward. The agent, regardless of his information, prefers the rew...

Unplanned Purchases and Retail Competition

By Justin P. Johnson

American Economic Review, March 2017

I propose a framework in which asymmetric multiproduct retailers compete for one-stop shoppers who have biased beliefs about their future purchase probabilities (and so make unplanned purchases). One firm carries a full portfolio of products while the oth...

The Economic Consequences of Social-Network Structure

By Matthew O. Jackson, Brian W. Rogers, and Yves Zenou

Journal of Economic Literature, March 2017

We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of "macro" and "micro" characteristics of social-interaction networks and discuss both the theoretical and empirical findings concerning the r...

Information Avoidance

By Russell Golman, David Hagmann, and George Loewenstein

Journal of Economic Literature, March 2017

We commonly think of information as a means to an end. However, a growing theoretical and experimental literature suggests that information may directly enter the agent's utility function. This can create an incentive to avoid information, even when it is...

The Social Cost of Near-Rational Investment

By Tarek A. Hassan and Thomas M. Mertens

American Economic Review, April 2017

We show that the stock market may fail to aggregate information even if it appears to be efficient, and that the resulting decrease in the information content of prices may drastically reduce welfare. We solve a macroeconomic model in which information ab...

Reducing Crime and Violence: Experimental Evidence from Cognitive Behavioral Therapy in Liberia

By Christopher Blattman, Julian C. Jamison, and Margaret Sheridan

American Economic Review, April 2017

We show that a number of noncognitive skills and preferences, including patience and identity, are malleable in adults, and that investments in them reduce crime and violence. We recruited criminally engaged men and randomized one-half to eight weeks of c...

Correlation Misperception in Choice

By Andrew Ellis and Michele Piccione

American Economic Review, April 2017

We present a decision-theoretic analysis of an agent's understanding of the interdependencies in her choices. We provide the foundations for a simple and flexible model that allows the misperception of correlated risks. We introduce a framework in which t...

Conditional Retrospective Voting in Large Elections

By Ignacio Esponda and Demian Pouzo

American Economic Journal: Microeconomics, May 2017

We introduce a solution concept in the context of large elections with private information by embedding a model of boundedly rational voters into an otherwise standard equilibrium setting. A retrospective voting equilibrium (RVE) formalizes the idea that ...

Accountability and Information in Elections

By Scott Ashworth, Ethan Bueno de Mesquita, and Amanda Friedenberg

American Economic Journal: Microeconomics, May 2017

Elections are thought to improve voter welfare through two channels: effective accountability (i.e., providing incentives for politicians to take costly effort) and electoral selection (i.e., retaining politicians with characteristics voters value). We ...

Age-Dependent Payoffs and Assortative Matching by Age in a Market with Search

By Anja Sautmann

American Economic Journal: Microeconomics, May 2017

This paper considers a matching market with two-sided search and transferable utility where match payoffs depend on age at marriage (time until match) and search is finite. We define and prove existence of equilibrium, and provide sufficient conditions fo...

Aggregate Uncertainty Can Lead to Incorrect Herds

By Ignacio Monzón

American Economic Journal: Microeconomics, May 2017

A continuum of homogeneous rational agents choose between two competing technologies. Agents observe a private signal and sample others' previous choices. Signals have an aggregate component of uncertainty, so aggregate behavior does not necessarily refle...

The Ethics of Incentivizing the Uninformed: A Vignette Study

By Sandro Ambuehl and Axel Ockenfels

American Economic Review, May 2017

Our recent working paper (Ambuehl, Ockenfels, and Stewart 2017) shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction, and decide to participat...

Trumping Norms: Lab Evidence on Aggressive Communication before and after the 2016 US Presidential Election

By Jennie Huang and Corinne Low

American Economic Review, May 2017

This paper provides evidence from a negotiation experiment that the 2016 US presidential election of Donald Trump had a profound impact on individual behavior in the lab. Using a Battle of the Sexes game with unstructured communication, we find that post-...

Why Being Wrong Can Be Right: Magical Warfare Technologies and the Persistence of False Beliefs

By Nathan Nunn and Raul Sanchez de la Sierra

American Economic Review, May 2017

Across human societies, one sees many examples of deeply rooted and widely held beliefs that are almost certainly untrue. Examples include beliefs about witchcraft, magic, ordeals, and superstitions. Why are such incorrect beliefs so prevalent and how do ...