Heterogeneous Beliefs and School Choice Mechanisms

By Adam J. Kapor, Christopher A. Neilson, and Seth D. Zimmerman

American Economic Review, May 2020

This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions ch...

Learning under Diverse World Views: Model-Based Inference

By George J. Mailath and Larry Samuelson

American Economic Review, May 2020

People reason about uncertainty with deliberately incomplete models. How do people hampered by different, incomplete views of the world learn from each other? We introduce a model of "model-based inference." Model-based reasoners partition an otherwise ho...

Cross-Country Differences in Intergenerational Earnings Mobility

[Symposium: Intergenerational Mobility]

By Gary Solon

Journal of Economic Perspectives, Summer 2002

International studies of the extent to which economic status is passed from one generation to the next are important for at least two reasons. First, each study of a particular country characterizes an important feature of that country's income inequality...

The Allocation of Decision Authority to Human and Artificial Intelligence

By Susan C. Athey, Kevin A. Bryan, and Joshua S. Gans

AEA Papers and Proceedings, May 2020

The allocation of decision authority by a principal to either a human agent or an artificial intelligence (AI) is examined. The principal trades off an AI's more aligned choice with the need to motivate the human agent to expend effort in learning choice ...

Algorithmic Social Engineering

By Bo Cowgill and Megan T. Stevenson

AEA Papers and Proceedings, May 2020

We examine the microeconomics of using algorithms to nudge decision-makers toward particular social outcomes. We refer to this as "algorithmic social engineering." In this article, we apply classic strategic communication models to this strategy. Manipula...

Measuring Collaboration in Modern Organizations

By Stephen Michael Impink, Andrea Prat, and Raffaella Sadun

AEA Papers and Proceedings, May 2020

Internal communication has been a central theme in organizational economics, as employee collaboration provides insight into the structure of firms. Use of electronic communications data can be transformational for organizational economics, as these data ...

Knowledge, Stories, and Culture in Organizations

By Robert Gibbons and Laurence Prusak

AEA Papers and Proceedings, May 2020

Organizations are full of stories; organizational economics, not so much. Rather, organizational economics has little work that conceptualizes the role or measures the incidence of stories in organizations. This shortage concerns us not only because stori...

Do Workers Comply with Salary History Bans? A Survey on Voluntary Disclosure, Adverse Selection, and Unraveling

By Amanda Agan, Bo Cowgill, and Laura Katherine Gee

AEA Papers and Proceedings, May 2020

Salary history bans forbid employers from asking job candidates to disclose their salaries. However, applicants can still volunteer this information. Our theoretical model predicts that the effect of these laws varies by how workers comply. Our survey of ...

A Test of Enhancing Learning in Economics through Nudges

By Rita Balaban and Patrick Conway

AEA Papers and Proceedings, May 2020

We test for the importance of nudges in improving student performance in introductory economics courses at UNC-Chapel Hill. We use a randomized controlled trial to test the effectiveness of nudges in encouraging use of academic supports and (jointly) the ...

How Often Does Active Learning Actually Occur? Perception versus Reality

By Brandon J. Sheridan and Ben Smith

AEA Papers and Proceedings, May 2020

Substantial evidence suggests active learning pedagogies are superior to lecturing, but little evidence exists on the prevalence of such methods. Watts and Schaur (2011) find, based on self-reported data, the median instructor lectures 83 percent of the t...

The Polarization of Reality

By Alberto Alesina, Armando Miano, and Stefanie Stantcheva

AEA Papers and Proceedings, May 2020

Americans are polarized not only in their views on policy issues and attitudes toward government and society but also in their perceptions of the same factual reality. We conceptualize how to think about the "polarization of reality" and review recent pap...

School Vouchers: A Critical View

[Symposium: School Vouchers]

By Helen F. Ladd

Journal of Economic Perspectives, Fall 2002

This paper marshals available evidence from both the U.S. and other countries on the effects of private schools, peer effects, and competition to demonstrate that that any gains in overall student achievement from a large scale voucher program are at best...

Sticky Expectations and Consumption Dynamics

By Christopher D. Carroll, Edmund Crawley, Jiri Slacalek, Kiichi Tokuoka, and Matthew N. White

American Economic Journal: Macroeconomics, July 2020

To match aggregate consumption dynamics, macroeconomic models must generate "excess smoothness" in consumption expenditures. But microfounded models are calibrated to match micro data, which exhibit no "excess smoothness." So standard microfounded models ...

Field Experiments and the Practice of Economics

By Abhijit Vinayak Banerjee

American Economic Review, July 2020

Acquiring Information through Peers

By Bernard Herskovic and João Ramos

American Economic Review, July 2020

We develop an endogenous network formation model, in which agents form connections to acquire information. Our model features complementarity in actions as agents care not only about accuracy of their decision-making but also about the actions of other ag...

The Impact of Information Technology on the Diffusion of New Pharmaceuticals

By Kenneth J. Arrow, L. Kamran Bilir, and Alan Sorensen

American Economic Journal: Applied Economics, July 2020

Do information differences across US physicians contribute to treatment disparities? This paper uses a unique new dataset to evaluate how changes in physician access to a decision-relevant drug database affect prescribing decisions. Our results indicate d...

The Value of Reference Letters: Experimental Evidence from South Africa

By Martin Abel, Rulof Burger, and Patrizio Piraino

American Economic Journal: Applied Economics, July 2020

We show that reference letters from former employers alleviate information frictions in a low-skill labor market, improving applicant screening and gender equity. A resume audit study finds that using a reference letter in the application increases callba...

Durable Goods Theory for Real World Markets

By Michael Waldman

Journal of Economic Perspectives, Winter 2003

The early 1970s witnessed three major advances in durable-goods theory--Swan (1970, 1971) and Sieper and Swan (1973) on optimal durability, Coase (1972) on time inconsistency, and Akerlof (1970) on adverse selection. This paper surveys durable goods theor...

Pricing Network Effects: Competition

By Itay P. Fainmesser and Andrea Galeotti

American Economic Journal: Microeconomics, August 2020

We study the practice of influencer marketing in oligopoly markets and its effect on market efficiency. In our model, each consumer is influenced by choices of a subset of other consumers. Firms gather information on consumers' influence and price discrim...

History-Bound Reelections

By Hans Gersbach

American Economic Journal: Microeconomics, August 2020

We introduce history-bound reelections. In their simple form, they consist in a "score-replication rule." Under such a rule, an incumbent has to match the highest vote share he or she has obtained in any previous election in order to be reelected. We deve...