Messages That Foster a Sense of Belonging Improve Learning and Satisfaction: An Experiment in an Online Environment

By Sara Avila Forcada

AEA Papers and Proceedings, May 2023

The literature in pedagogy has shown that having a sense of belonging affects learning. This paper shows the result of a communication experiment in an online environment. For six consecutive terms, the instructor taught Introduction to Statistics. The in...

Mental Models and Transfer Learning

By Ignacio Esponda, Emanuel Vespa, and Sevgi Yuksel

AEA Papers and Proceedings, May 2023

Using a laboratory experiment, we investigate the extent to which learning is transferred between related problems in the context of an updating task. The updating principle we study requires updating positively after a positive signal and negatively afte...

Optimal Lending Contracts with Retrospective and Prospective Bias

By J. Aislinn Bohren and Daniel N. Hauser

AEA Papers and Proceedings, May 2023

Model misspecification is a common approach to model belief formation distortions. Misspecified models can be decomposed into two classes of distortions: prospective and retrospective biases (Bohren and Hauser 2023). Prospective biases correspond to disto...

Reputation and Partial Default

By Manuel Amador and Christopher Phelan

American Economic Review: Insights, June 2023

This paper presents a continuous-time reputation model of sovereign debt allowing for both varying levels of partial default and full default. In it, a government can be a nonstrategic commitment type or a strategic opportunistic type, and a government's ...

How Experiments with Children Inform Economics

By John A. List, Ragan Petrie, and Anya Samek

Journal of Economic Literature, June 2023

In the past several decades, the experimental method has lent deep insights into economics. One area that has contributed is the experimental study of children, where advances as varied as the evolution of human behaviors that shape markets and institut...

Game Theory and the First World War

By Roger B. Myerson

Journal of Economic Literature, June 2023

Books by Scott Wolford and Roger Ransom show how economic theories of games and decisions can be fruitfully applied to problems in World War I. This vital application offers fundamental insights into the analytical methods of game theory. Public random va...

Generic Aversion and Observational Learning in the Over-the-Counter Drug Market

By Mariana Carrera and Sofia Villas-Boas

American Economic Journal: Applied Economics, July 2023

Through a labeling intervention at a national retailer, we test three hypotheses for consumer aversion to generic over-the-counter drugs: lack of information on the comparability of generic and brand drugs, inattention to their price differences, and unce...

Prudential Policy with Distorted Beliefs

By Eduardo Dávila and Ansgar Walther

American Economic Review, July 2023

This paper studies leverage regulation when equity investors and/or creditors have distorted beliefs relative to a planner. We characterize how the optimal regulation responds to arbitrary changes in investors'/creditors' beliefs, relating our results to ...

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

By Olivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko, and Maarten van Rooij

American Economic Journal: Macroeconomics, July 2023

We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect consumption decisions. ...

Competition for Attention and News Quality

By Heng Chen and Wing Suen

American Economic Journal: Microeconomics, August 2023

Over the past decades the number of news outlets has increased dramatically, but the quality of news products has declined. We propose a model to reconcile these facts where consumers' attention allocation decisions not only depend on but also affect news...

Self-Reported Signaling

By Thomas Jungbauer and Michael Waldman

American Economic Journal: Microeconomics, August 2023

In many real-world settings, an action that affects the value of a product or service is self-reported rather than publicly observable. We investigate self-reporting when self-reports serve as a signal of sender productivity. In our model, a sender choose...

Information Spillover in Multi-good Adverse Selection

By Bingchao Huangfu and Heng Liu

American Economic Journal: Microeconomics, August 2023

This paper analyzes information spillover in a multi-good adverse selection model in which a privately informed seller trades two different goods in two different markets. Buyers learn the seller's information from both the market they participate in and ...

Equilibrium Screening and Categorical Inequality

By Mogens Fosgerau, Rajiv Sethi, and Jörgen Weibull

American Economic Journal: Microeconomics, August 2023

We analyze equilibrium outcomes under costly screening of candidates from distinct categories. Candidates choose how much effort to invest in skill acquisition, and the screener decides how carefully to screen each candidate. Typically, there are multiple...

Influence Campaigns

By Evan Sadler

American Economic Journal: Microeconomics, August 2023

Firms and politicians, among others, invest heavily to influence people's opinions. Because peers influence one another, these efforts must account for social networks. Using a model of opinion dynamics with a non-degenerate steady state, I develop a new ...

Bargaining over Treatment Choice under Disagreement

By Nabil I. Al-Najjar and Robert J. Gary-Bobo

American Economic Journal: Microeconomics, August 2023

A group of experts with different prior beliefs must choose a treatment. A dataset is made public and leads to revisions of beliefs. We propose a model where the experts' disagreements are resolved through bargaining, using the Nash bargaining solution. E...

Disclosure in Markets for Ratings

By Ran Weksler and Boaz Zik

American Economic Journal: Microeconomics, August 2023

We study the implications of the disclosure regime of ratings on the level of information released to the public. Specifically, we compare mandatory and voluntary disclosure. We analyze a model where the potential issuers are initially endowed with homoge...

Bounds on a Slope from Size Restrictions on Economic Shocks

By Marco Stenborg Petterson, David Seim, and Jesse M. Shapiro

American Economic Journal: Microeconomics, August 2023

We study the problem of learning about the effect of one market-level variable (e.g., price) on another (e.g., quantity) in the presence of shocks to unobservables (e.g., preferences). We show that economic intuitions about the plausible size of the shock...

Incentivizing School Attendance in the Presence of Parent-Child Information Frictions

By Damien de Walque and Christine Valente

American Economic Journal: Economic Policy, August 2023

Many countries use CCTs targeted to parents to promote schooling. Attendance conditions may work through two channels: incentivization and information. If children have private information, (i) providing attendance information to parents may increase atte...

Interregional Contact and the Formation of a Shared Identity

By Manuel Bagues and Christopher Roth

American Economic Journal: Economic Policy, August 2023

We study the long-run effects of contact with individuals from other regions in early adulthood on preferences, beliefs, and national identity. We combine a natural experiment, the random assignment of male conscripts to different locations throughout Spa...

Imperfect Financial Markets and Investment Inefficiencies

By Elias Albagli, Christian Hellwig, and Aleh Tsyvinski

American Economic Review, September 2023

We analyze the consequences of noisy information aggregation for investment. Market imperfections create endogenous rents that cause overinvestment in upside risks and underinvestment in downside risks. In partial equilibrium, these inefficiencies are par...