Understanding Price Controls and Nonprice Competition with Matching Theory

By John William Hatfield, Charles R. Plott, and Tomomi Tanaka

American Economic Review, May 2012

We develop a quality competition model to understand how price controls affect market outcomes in buyer-seller markets with discrete goods of varying quality. While competitive equilibria do not necessarily exist in such markets when price controls are im...

Making Private Data Accessible in an Opaque Industry: The Experience of the Private Capital Research Institute

By Leslie Jeng and Josh Lerner

American Economic Review, May 2016

Private markets are becoming an increasingly important way of financing rapidly growing and mature firms, and private investors are reputed to have far-reaching economic impacts. These important markets, however, are uniquely difficult to study. This pape...

Credit Supply and the Price of Housing

By Giovanni Favara and Jean Imbs

American Economic Review, March 2015

An exogenous expansion in mortgage credit has significant effects on house prices. This finding is established using US branching deregulations between 1994 and 2005 as instruments for credit. Credit increases for deregulated banks, but not in placebo sam...

Markets and Morality

By Jagdish Bhagwati

American Economic Review, May 2011

The paper addresses two issues. First, economics has evolved both as a positive science and, from moral philosophy, also as a normative discipline. Advancing the public good requires that public policy walk on both these legs. Second, the criticism has be...

Social Support Substitution and the Earnings Rebound: Evidence from a Regression Discontinuity in Disability Insurance Reform

By Lex Borghans, Anne C. Gielen, and Erzo F. P. Luttmer

American Economic Journal: Economic Policy, November 2014

We exploit a cohort discontinuity in the stringency of Dutch disability reforms to estimate the effects of decreased DI (disability insurance) generosity on behavior of existing recipients. We find evidence of social support substitution: individuals o...

School Competition and Efficiency with Publicly Funded Catholic Schools

By David Card, Martin D. Dooley, and A. Abigail Payne

American Economic Journal: Applied Economics, October 2010

We study competition between two publicly funded school systems in Ontario, Canada: one that is open to all students, and one that is restricted to children of Catholic backgrounds. A simple model of competition between the competing systems predicts grea...

From Micro to Macro via Production Networks

[Symposium: Social Networks]

By Vasco M. Carvalho

Journal of Economic Perspectives, Fall 2014

A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. In this essay, I argue that this n...

Financial Innovation, Collateral, and Investment

By Ana Fostel and John Geanakoplos

American Economic Journal: Macroeconomics, January 2016

Financial innovations that change how promises are collateralized affect prices and investment, even in the absence of any change in fundamentals. In C-models, the ability to leverage an asset always generates overinvestment compared to Arrow-Debreu. Cred...

In the Name of the Son (and the Daughter): Intergenerational Mobility in the United States, 1850-1940

By Claudia Olivetti and M. Daniele Paserman

American Economic Review, August 2015

This paper estimates historical intergenerational elasticities between fathers and children of both sexes in the United States using a novel empirical strategy. The key insight of our approach is that the information about socioeconomic status conveyed by...

Asymmetric Information and Public Economics: The Mirrlees-Vickrey Nobel Prize

By Agnar Sandmo

Journal of Economic Perspectives, Winter 1999

This paper surveys the contributions of Nobel laureates James Mirrlees and William Vickrey to the study of asymmetric information in economics, particularly as they relate to problems in public economics. It discusses and interprets Mirrlees's work on opt...

Effects of Immigrant Legalization on Crime

By Scott R. Baker

American Economic Review, May 2015

I examine the effects that the 1986 Immigration Reform and Control Act (IRCA), which legalized almost 3 million immigrants, had on crime in the United States. I exploit the IRCA's quasi-random timing as well as geographic variation in the intensity of tre...

Child Benefit Support and Method of Payment: Evidence from a Randomized Experiment in Belgium

By Marieke Huysentruyt and Eva Lefevere

American Economic Journal: Economic Policy, May 2010

We examine the effects of information and information presentation format on individuals' choice of payment method in a large randomized experiment carried out with the Belgian National Office for Family Benefits. We find that a one-time mailing providing...

Price, Quality, and Variety: Measuring the Gains from Trade in Differentiated Products

By Gloria Sheu

American Economic Journal: Applied Economics, October 2014

This paper explores the gains from trade in differentiated products from three channels: decreases in price, improvements in quality, and increases in variety. Using data on Indian imports of computer printers from 1996 to 2005, a period of trade liber...

Detection, Identification, and Estimation of Loss Aversion: Evidence from an Auction Experiment

By A. Banerji and Neha Gupta

American Economic Journal: Microeconomics, February 2014

We provide a novel experimental auction design, in which (i) an exogenous decrease in the probability of winning, conditional on the bid, reduces the optimal bid of a loss averse agent whose reference point is expectations based; (ii) observed bid distri...

Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments

By Urs Fischbacher and Simon Gächter

American Economic Review, March 2010

One lingering puzzle is why voluntary contributions to public goods decline over time in experimental and real-world settings. We show that the decline of cooperation is driven by individual preferences for imperfect conditional cooperation. Many people's...

The Big Sort: College Reputation and Labor Market Outcomes

By W. Bentley MacLeod, Evan Riehl, Juan E. Saavedra, and Miguel Urquiola

American Economic Journal: Applied Economics, July 2017

We explore how college reputation affects the "big sort," the process by which students choose colleges and find their first jobs. We incorporate a simple definition of college reputation—graduates' mean admission scores—into a competitive lab...

Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate

By Michael J. Roberts and Wolfram Schlenker

American Economic Review, October 2013

We present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters. In the agricultural context, past yield shocks change inventory levels and futures prices of agricultural commodi...

Bid Preference Programs and Participation in Highway Procurement Auctions

By Elena Krasnokutskaya and Katja Seim

American Economic Review, October 2011

We use data from highway procurement auctions subject to California's Small Business Preference program to study the effect of bid preferences on auction outcomes. Our analysis is based on an estimated model of firms' bidding and participation decisions,...

The Historical Fertility Transition: A Guide for Economists

By Timothy W. Guinnane

Journal of Economic Literature, September 2011

The historical fertility transition is the process by which much of Europe and North America went from high to low fertility in the nineteenth and early twentieth centuries. This transformation is central to recent accounts of long-run economic growth. P...

Zombie Lending and Depressed Restructuring in Japan

By Ricardo J. Caballero, Takeo Hoshi, and Anil K. Kashyap

American Economic Review, December 2008

Large Japanese banks often engaged in sham loan restructurings that kept credit flowing to otherwise insolvent borrowers (which we call zombies). We examine the implications of suppressing the normal competitive process whereby the zombies would shed w...