The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences

By Robert Sugden

American Economic Review, September 2004

This paper proposes a formulation of consumer sovereignty, for use in normative economics, which does not presuppose individuals' preferences to be coherent. The fundamental intuition, that opportunity and responsibility have moral value, is formalized as...

The Politician and the Judge: Accountability in Government

By Eric Maskin and Jean Tirole

American Economic Review, September 2004

We build a simple model to capture the major virtues and drawbacks of making public officials accountable (i. e., subjecting them to reelection): On the one hand, accountability allows the public to screen and discipline their officials; on the other, it ...

Rational Overoptimism (and Other Biases)

By Eric Van den Steen

American Economic Review, September 2004

Rational agents with differing priors tend to be overoptimistic about their chances of success. In particular, an agent who tries to choose the action that is most likely to succeed, is more likely to choose an action of which he overestimated, rather tha...

Effects of Technology on Incentive Design of Share Contracts

By Priyanka Pandey

American Economic Review, September 2004

A Comment on the Economics of Labor Adjustment: Mind the Gap

By Russell Cooper and Jonathan L. Willis

American Economic Review, September 2004

Bad Beta, Good Beta

By John Y. Campbell and Tuomo Vuolteenaho

American Economic Review, December 2004

This paper explains the size and value "anomalies" in stock returns using an economically motivated two-beta model. We break the beta of a stock with the market portfolio into two components, one reflecting news about the market's future cash flows and on...

Does Fund Size Erode Mutual Fund Performance? The Role of Liquidity and Organization

By Joseph Chen, Harrison Hong, Ming Huang, and Jeffrey D. Kubik

American Economic Review, December 2004

We investigate the effect of scale on performance in the active money management industry. We first document that fund returns, both before and after fees and expenses, decline with lagged fund size, even after accounting for various performance benchmark...

Markups, Aggregation, and Inventory Adjustment

By Daniele Coen-Pirani

American Economic Review, December 2004

In this paper I suggest a unified explanation for two puzzles in the inventory literature: first, estimates of inventory speeds of adjustment in aggregate data are very small relative to the apparent rapid reaction of stocks to unanticipated variations in...

Constructing Price Indexes across Space and Time: The Case of the European Union

By Robert J. Hill

American Economic Review, December 2004

This paper considers the problem of how to construct and reconcile price indexes across space and time. A general taxonomy of panel price index methods, containing four broad classes, is proposed, along with five criteria for discriminating between them. ...

Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income

By J. Peter Neary

American Economic Review, December 2004

Real incomes are routinely compared internationally using methods that "correct" for deviations from purchasing power parity. The most widely used of these is the Geary method which, though theoretically suspect, underlies the Penn World Table. This paper...

Gibrat's Law for (All) Cities

By Jan Eeckhout

American Economic Review, December 2004

Two empirical regularities concerning the size distribution of cities have repeatedly been established: Zipf's law holds (the upper tail is Pareto), and city growth is proportionate. Census 2000 data are used covering the entire size distribution, not jus...

When Does Learning in Games Generate Convergence to Nash Equilibria? The Role of Supermodularity in an Experimental Setting

By Yan Chen and Robert Gazzale

American Economic Review, December 2004

This study clarifies the conditions under which learning in games produces convergence to Nash equilibria in practice. We experimentally investigate the role of supermodularity, which is closely related to the more familiar concept of strategic complement...

Addiction and Cue-Triggered Decision Processes

By B. Douglas Bernheim and Antonio Rangel

American Economic Review, December 2004

We propose a model of addiction based on three premises: (i) use among addicts is frequently a mistake; (ii) experience sensitizes an individual to environmental cues that trigger mistaken usage; (iii) addicts understand and manage their susceptibilities....

Economic Understanding in US High School Courses

By William B. Walstad

American Economic Review, May 2013

The effects of courses on student achievement are studied using 2006 data from the National Assessment of Educational Progress (NAEP) in economics. A regression analysis showed expected and significant achievement differences by course, with the highest s...

Aggregating Local Preferences to Guide Marginal Policy Adjustments

By Daniel J. Benjamin, Ori Heffetz, Miles S. Kimball, and Nichole Szembrot

American Economic Review, May 2013

We propose a social choice rule for aggregating preferences elicited from surveys into a marginal adjustment of policy from the status quo. The mechanism is: (i) symmetric in its treatment of survey respondents; (ii) ordinal, using only the orientation of...

Status Incentives

By Timothy Besley and Maitreesh Ghatak

American Economic Review, May 2008

Telling Better Stories in Introductory Macro

By David Colander

American Economic Review, May 2000

The Continuous Combinatorial Auction Architecture

By Charles R. Plott, Hsing-Yang Lee, and Travis Maron

American Economic Review, May 2014

The paper reports the architecture of a continuous combinatorial auction. Preferences are based on sets of items and feasibility requires the nonintersection of sets. Countdown clocks replace eligibility and activity requirements typical of rounds-based a...

The Changing Distributions of New Ph.D. Economists and Their Employment: Implications for the Future

By Ronald G. Ehrenberg

Journal of Economic Perspectives, Summer 1999

This essay addressed the changing demographic composition of new Ph.D.s in economics and the changing distribution of the jobs that they are obtaining. It discusses how future trends may interact to influence the types of training that economists may prov...

Correspondence

By Douglas Holtz-Eakin

Journal of Economic Perspectives, Fall 1993