Weighted Utility and Optimism/Pessimism: A Decision-Theoretic Foundation of Various Stochastic Dominance Orders

By Tao Wang and Ehud Lehrer

American Economic Journal: Microeconomics, February 2024

We show that a probability distribution likelihood ratio dominates another distribution if and only if, for every weighted utility function, the former is preferred over the latter. Likewise, a probability distribution hazard rate (or reverse hazard rate)...

Constructive versus Toxic Argumentation in Debates

By Tymofiy Mylovanov and Andriy Zapechelnyuk

American Economic Journal: Microeconomics, February 2024

Two debaters address an audience by sequentially choosing their information strategies. We compare the setting where the second mover reveals additional information (constructive argumentation) with the setting where the second mover obfuscates the first ...

Regulating Privacy Online: An Economic Evaluation of the GDPR

By Samuel G. Goldberg, Garrett A. Johnson, and Scott K. Shriver

American Economic Journal: Economic Policy, February 2024

Modern websites rely on personal data to design better content and to market themselves. The European Union's General Data Protection Regulation (GDPR) was intended to make access to such personal data more difficult, with the goal of protecting user priv...

Mental Models and Learning: The Case of Base-Rate Neglect

By Ignacio Esponda, Emanuel Vespa, and Sevgi Yuksel

American Economic Review, March 2024

We experimentally document persistence of suboptimal behavior despite ample opportunities to learn from feedback in a canonical updating problem where people suffer from base-rate neglect. Our results provide insights on the mechanisms hindering learning ...

The Gender Gap in Confidence: Expected but Not Accounted For

By Christine L. Exley and Kirby Nielsen

American Economic Review, March 2024

We investigate how the gender gap in confidence affects the views that evaluators (e.g., employers) hold about men and women. We find the confidence gap is contagious, causing evaluators to form overly pessimistic beliefs about women. This result arises e...

The Irrelevance of Fee Structures for Certification

By Martin Pollrich and Roland Strausz

American Economic Review: Insights, March 2024

In models of certification, possible restrictions on the nature of the fee structures are commonly analyzed. We show that they are irrelevant for the certifier's ability to maximize profits and trade efficiency. Our results establish that certification sc...

Private Input Suppliers as Information Agents for Technology Adoption in Agriculture

By Manzoor H. Dar, Alain de Janvry, Kyle Emerick, Elisabeth Sadoulet, and Eleanor Wiseman

American Economic Journal: Applied Economics, April 2024

Information frictions limit the adoption of new agricultural technologies in developing countries. Efforts to improve learning involve spreading information from government agents to farmers. We show that when compared to this government approach, informi...

Is Journalistic Truth Dead? Measuring How Informed Voters Are about Political News

By Charles Angelucci and Andrea Prat

American Economic Review, April 2024

To investigate general patterns in news information in the United States, we combine a protocol for identifying major political news stories, 11 monthly surveys with 15,000 participants, and a model of news discernment. When confronted with a true and a f...

Anticipatory Anxiety and Wishful Thinking

By Jan B. Engelmann, Maël Lebreton, Nahuel A. Salem-Garcia, Peter Schwardmann, and Joël J. van der Weele

American Economic Review, April 2024

Across five experiments (N = 1,714), we test whether people engage in wishful thinking to alleviate anxiety about adverse future outcomes. Participants perform pattern recognition tasks in which some patterns may result in an electric shock or a monetary ...

Motivated Errors

By Christine L. Exley and Judd B. Kessler

American Economic Review, April 2024

Myriad environments allow for the possibility of confusion. Agents may appeal to such confusion—or the possibility of making an honest mistake—to justify their behavior. In three sets of experiments involving thousands of subjects, we document evidenc...

Nurturing Childhood Curiosity to Enhance Learning: Evidence from a Randomized Pedagogical Intervention

By Sule Alan and Ipek Mumcu

American Economic Review, April 2024

We evaluate a pedagogical intervention aimed at improving learning in elementary school children by fostering their curiosity. We test the effectiveness of the pedagogy using achievement scores and a novel measure of curiosity. The latter involves creatin...

Ambiguity Aversion and Heterogeneity in Households' Beliefs

By Claudio Michelacci and Luigi Paciello

American Economic Journal: Macroeconomics, April 2024

UK households that wish for lower inflation and lower nominal interest rates have higher expected inflation. We interpret the evidence through the lens of a New Keynesian model where ambiguity-averse households differ in wealth, skill, labor market partic...

Uncertainty and Information Acquisition: Evidence from Firms and Households

By Heiner Mikosch, Christopher Roth, Samad Sarferaz, and Johannes Wohlfart

American Economic Journal: Macroeconomics, April 2024

We leverage the small open economy Switzerland as a testing ground for basic premises of macroeconomic models of endogenous information acquisition, using tailored surveys of firms and households. Firms and households perceiving a greater exposure to exch...

The Fake News Effect: Experimentally Identifying Motivated Reasoning Using Trust in News

By Michael Thaler

American Economic Journal: Microeconomics, May 2024

Motivated reasoning posits that people distort how they process information in the direction of beliefs they find attractive. This paper creates a novel experimental design to identify motivated reasoning from Bayesian updating when people have preconceiv...

Strategic Incentives and the Optimal Sale of Information

By Rosina Rodríguez Olivera

American Economic Journal: Microeconomics, May 2024

A monopolist data seller offers information to privately informed data buyers. I characterize the seller's optimal menu, which screens between two types of buyers. Buyers' preferences for information allow the seller to extract all surplus, and the optima...

Consumer Search and Product Returns in E-Commerce

By Maarten Janssen and Cole Williams

American Economic Journal: Microeconomics, May 2024

E-commerce has led to a surge in products being returned after purchase. We analyze product returns as resulting from a trade-off between the social waste of returns and the search efficiency gains of being able to inspect a product's value after purchase...

Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice

By Peter Bergman, Raj Chetty, Stefanie DeLuca, Nathaniel Hendren, Lawrence F. Katz, and Christopher Palmer

American Economic Review, May 2024

Low-income families often live in low-upward-mobility neighborhoods. We study why by using a randomized trial with housing voucher recipients that provided information, financial support, and customized search assistance to move to high-opportunity neighb...

From Fog to Smog: The Value of Pollution Information

By Panle Jia Barwick, Shanjun Li, Liguo Lin, and Eric Yongchen Zou

American Economic Review, May 2024

In 2013, China launched a landmark program to monitor air quality and disclose real-time data, significantly increasing the public's access to and awareness of pollution information. The program triggered cascading behavioral changes such as stronger avoi...

Government Data of the People, by the People, for the People: Navigating Citizen Privacy Concerns

[Symposium: Privacy Protection and Government Data]

By Claire McKay Bowen

Journal of Economic Perspectives, Spring 2024

The data privacy community generally agrees that government data should be more widely accessible, especially being of the people (data collected about them), by the people (collected and supported using taxpayer dollars), and for the people (providing pu...

When Privacy Protection Goes Wrong: How and Why the 2020 Census Confidentiality Program Failed

[Symposium: Privacy Protection and Government Data]

By Steven Ruggles

Journal of Economic Perspectives, Spring 2024

The US Census Bureau implemented a new disclosure control strategy for the 2020 Census that adds deliberate error to every population statistic for every geographic unit smaller than a state, including metropolitan areas, cities, and counties. This arti...