The Making of an Economist Redux

By David Colander

Journal of Economic Perspectives, Winter 2005

This paper reports the findings of a survey and interviews with graduate students at seven top-ranking graduate economics programs. It finds that over the last 15 years graduate economics programs have become more empirical, less mathematical and less the...

Child Labor in the Global Economy

By Eric V. Edmonds and Nina Pavcnik

Journal of Economic Perspectives, Winter 2005

Few issues in developing countries draw as much popular attention as child labor. This paper begins by quantifying the extent and main characteristics of child labor. It then considers the evidence on a range of issues about child labor. Fundamentally, ch...

Asymmetric Attention

By Alexandre N. Kohlhas and Ansgar Walther

American Economic Review, September 2021

We document that the expectations of households, firms, and professional forecasters in standard surveys simultaneously extrapolate from recent events and underreact to new information. Existing models of expectation formation, whether behavioral or ratio...

Justified Communication Equilibrium

By Daniel Clark and Drew Fudenberg

American Economic Review, September 2021

Justified communication equilibrium (JCE) is an equilibrium refinement for signaling games with cheap-talk communication. A strategy profile must be a JCE to be a stable outcome of nonequilibrium learning when receivers are initially trusting and senders ...

Teaching Labor Laws: Evidence from a Randomized Control Trial in South Africa

By Marianne Bertrand and Bruno Crépon

American Economic Journal: Applied Economics, October 2021

We assess whether imperfect knowledge of labor regulation hinders job creation at small and medium-sized firms. We partner with a labor law expert organization that provides information about labor regulation via newsletters and access to a specialized we...

Household Search and the Marital Wage Premium

By Laura Pilossoph and Shu Lin Wee

American Economic Journal: Macroeconomics, October 2021

We develop a model where selection into marriage and household search generate a marital wage premium. Beyond selection, married individuals earn higher wages for two reasons. First, income pooling within a joint household raises risk-averse individuals' ...

Mistakes, Overconfidence, and the Effect of Sharing on Detecting Lies

By Marta Serra-Garcia and Uri Gneezy

American Economic Review, October 2021

Mistakes and overconfidence in detecting lies could help lies spread. Participants in our experiments observe videos in which senders either tell the truth or lie, and are incentivized to distinguish between them. We find that participants fail to detect ...

Neighborhood-Based Information Costs

By Benjamin Hébert and Michael Woodford

American Economic Review, October 2021

We derive a new cost of information in rational inattention problems, the neighborhood-based cost functions, starting from the observation that many settings involve exogenous states with a topological structure. These cost functions are uniformly posteri...

Projection of Private Values in Auctions

By Tristan Gagnon-Bartsch, Marco Pagnozzi, and Antonio Rosato

American Economic Review, October 2021

We explore how taste projection—the tendency to overestimate how similar others' tastes are to one's own—affects bidding in auctions. In first-price auctions with private values, taste projection leads bidders to exaggerate the intensity of competitio...

Naïve Learning with Uninformed Agents

By Abhijit Banerjee, Emily Breza, Arun G. Chandrasekhar, and Markus Mobius

American Economic Review, November 2021

The DeGroot model has emerged as a credible alternative to the standard Bayesian model for studying learning on networks, offering a natural way to model naïve learning in a complex setting. One unattractive aspect of this model is the assumption that ...

Labor Supply Responses to Learning the Tax and Benefit Schedule

By Andreas R. Kostøl and Andreas S. Myhre

American Economic Review, November 2021

Despite the implications for policy, empirical evidence on the relative importance of factors that shape labor supply responses is missing. This paper helps fill this gap and quantifies the role of information frictions versus other frictions by combining...

Prosecutor Quality, Witness Participation, Crime, and Reform

By Andrew F. Daughety and Jennifer F. Reinganum

American Economic Journal: Microeconomics, November 2021

We develop a model wherein concerns about prosecutor quality reduce the willingness of witnesses to cooperate with prosecutors. This causes an increase in the crime rate and in wrongly convicted innocent defendants. Because citizens are taxpayers and may ...

Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs

By Florian Engl, Arno Riedl, and Roberto Weber

American Economic Journal: Microeconomics, November 2021

Most institutions are limited in scope. We study experimentally how enforcement institutions affect behavior, preferences, and beliefs beyond their direct influence over the behaviors they control. Groups play two identical public good games, with coopera...

Dynamic Evaluation Design

By Alex Smolin

American Economic Journal: Microeconomics, November 2021

A principal owns a firm, hires an agent of uncertain productivity, and designs a dynamic policy for evaluating his performance. The agent observes ongoing evaluations and decides when to quit. When not quitting, the agent is paid a wage that is linear in ...

The Market for Online Influence

By Itay P. Fainmesser and Andrea Galeotti

American Economic Journal: Microeconomics, November 2021

Recent developments in social media have morphed the age-old practice of paying influential individuals for product endorsements into a multibillion dollar industry, extending well beyond celebrity sponsorships. We develop a parsimonious model in which ...

A Delegation-Based Theory of Expertise

By Attila Ambrus, Volodymyr Baranovskyi, and Aaron Kolb

American Economic Journal: Microeconomics, November 2021

We investigate information aggregation and competition in a delegation framework. An uninformed principal is unable to perform a task herself and must choose between one of two biased and imperfectly informed experts. In the focal equilibrium, experts exa...

Orchestrating Information Acquisition

By Jingfeng Lu, Lixin Ye, and Xin Feng

American Economic Journal: Microeconomics, November 2021

We study how to orchestrate information acquisition in an environment where bidders endowed with original estimates ("types") about their private values can acquire further information by incurring a cost. We consider both single-round and fully sequentia...

Disclosure and Subsequent Innovation: Evidence from the Patent Depository Library Program

By Jeffrey L. Furman, Markus Nagler, and Martin Watzinger

American Economic Journal: Economic Policy, November 2021

How important is access to patent documents for subsequent innovation? We examine the expansion of the USPTO Patent Library system after 1975. Patent libraries provided access to patents before the Internet. We find that after patent library opening, loca...

Dividend Taxation and Corporate Governance

By Randall Morck and Bernard Yeung

Journal of Economic Perspectives, Summer 2005

In 2003, the United States enacted a tax reform that reduced, but did not eliminate, individual dividend income taxes. Cutting the dividend tax deprives corporate insiders of a justification for retaining earnings to build unprofitable corporate empires. ...

Sectoral Media Focus and Aggregate Fluctuations

By Ryan Chahrour, Kristoffer Nimark, and Stefan Pitschner

American Economic Review, December 2021

We formalize the editorial role of news media in a multisector economy and show that media can be an independent source of business cycle fluctuations, even when they report accurate information. Public reporting about a subset of sectoral developments th...