Optimal Nonlinear Pricing by a Dominant Firm under Competition

By Yong Chao, Guofu Tan, and Adam Chi Leung Wong

American Economic Journal: Microeconomics, May 2022

We consider a nonlinear pricing problem faced by a dominant firm competing with a minor firm. The dominant firm offers a general tariff first, and then the minor firm responds with a per-unit price, followed by a buyer choosing her purchases. By developin...

Transforming Ordinal Riskless Utility into Cardinal Risky Utility: A Comment on Chung, Glimcher, and Tymula (2019)

By Peter P. Wakker

American Economic Journal: Microeconomics, May 2022

Chung, Glimcher, and Tymula (2019) observed both consumers' choices over commodity bundles and choices under risk. They assumed a cardinal riskless utility function V representing consumer choices and a cardinal risky utility function U. The two were inco...

Intermediation and Steering: Competition in Prices and Commissions

By Tat-How Teh and Julian Wright

American Economic Journal: Microeconomics, May 2022

We explore the implications of steering by an informed profit-maximizing intermediary. The intermediary steers consumers by recommending firms, taking into account both the commissions firms offer and the prices they set. Such steering results in higher c...

Heterogeneous Impacts of Cost Shocks, Strategic Bidding, and Pass-Through: Evidence from the New England Electricity Market

By Harim Kim

American Economic Journal: Microeconomics, May 2022

Industry-wide shocks can have heterogeneous impacts on firms' costs due to different firm characteristics. The heterogeneity of these impacts is crucial for understanding the pass-through of the shock because of its implications for strategic competition....

Second-Degree Price Discrimination by a Two-Sided Monopoly Platform

By Doh-Shin Jeon, Byung-Cheol Kim, and Domenico Menicucci

American Economic Journal: Microeconomics, May 2022

We study second-degree price discrimination by a two-sided monopoly platform. The incentive constraints of the agents on the value creation side may be in conflict with internalizing externalities on the value capture side, which may render pooling optima...

Group Hug: Platform Competition with User Groups

By Sarit Markovich and Yaron Yehezkel

American Economic Journal: Microeconomics, May 2022

We consider platform competition for small users and a user group. One platform enjoys a quality advantage and the other benefits from favorable beliefs. We study whether the group mitigates the users' coordination problem⁠—i.e., joining a low-quality...

An Index of Competitiveness and Cooperativeness for Normal-Form Games

By Thomas Demuynck, Christian Seel, and Giang Tran

American Economic Journal: Microeconomics, May 2022

We develop an index of competitiveness and cooperativeness that is based on the primitives of a normal-form game, i.e., players, strategies and payoffs. The index relies on the unique decomposition of a given game into a zero-sum game and a common interes...

Bad News Turned Good: Reversal under Censorship

By Aleksei Smirnov and Egor Starkov

American Economic Journal: Microeconomics, May 2022

Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such "naïve" consumers is not too la...

Hump-Shaped Cross-Price Effects and the Extensive Margin in Cross-Border Shopping

By Richard Friberg, Frode Steen, and Simen A. Ulsaker

American Economic Journal: Microeconomics, May 2022

This paper examines the effect of cross-border shopping on grocery demand in Norway using monthly store × category sales data from Norway's largest grocery chain 2012–2016. The sensitivity of demand to the foreign price is hump-shaped and greatest 30�...

AEA News

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Barry Eichengreen, Distinguished Fellow 2022

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James Poterba, Distinguished Fellow 2022

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American Economic Association Announces Award Recipients for 2022

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March 17, 2022

View recipients of the 2022 awards, including the Clark Medalist, Distinguished Fellows, Foreign Honorary Members, and AEJ Best Paper Awards.

AEA Member Announcements: American Economic Association Announces Award Recipients for 2022

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April 26, 2022

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Carmen Reinhart, Distinguished Fellow 2022

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A Special Introduction

American Economic Review, May 2022

Front Matter

American Economic Review, May 2022

The Demand for Insurance and Rationale for a Mandate: Evidence from Workers' Compensation Insurance

By Marika Cabral, Can Cui, and Michael Dworsky

American Economic Review, May 2022

Workers' compensation insurance, which provides no-fault coverage for work-related injuries, is mandatory in nearly all states. We use administrative data from a unique market without a coverage mandate to estimate the demand for workers' compensation ins...

Signaling and Employer Learning with Instruments

By Gaurab Aryal, Manudeep Bhuller, and Fabian Lange

American Economic Review, May 2022

This paper considers the use of instruments to identify and estimate private and social returns to education within a model of employer learning. What an instrument identifies depends on whether it is hidden from, or transparent (i.e., observed) to, the e...

Multidimensional Auctions of Contracts: An Empirical Analysis

By Yunmi Kong, Isabelle Perrigne, and Quang Vuong

American Economic Review, May 2022

In this paper, we conduct a structural analysis of multi-attribute auctions of contracts with a general allocation rule when private information is multidimensional. Upon modeling bidders' contract value that accounts for their endogenous ex post actions,...