Too Far Away? The Effect of Distance to Headquarters on Business Establishment Performance

By Arturs Kalnins and Francine Lafontaine

American Economic Journal: Microeconomics, August 2013

In the population of over 1.7 million Texan sales-tax collecting business establishments, we show that greater distance to owner headquarters is associated with shorter establishment longevity. For the lodging industry, where we have revenue data, inc...

The Market for Evaluations

By Christopher Avery, Paul Resnick, and Richard Zeckhauser

American Economic Review, June 1999

Recent developments in computer networks have driven the cost of distributing information virtually to zero, creating extraordinary opportunities for sharing product evaluations. The authors present pricing and subsidy mechanisms that operate through a co...

Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices

By Joseph E. Harrington and Andrzej Skrzypacz

American Economic Review, October 2011

Motivated by recent cartel practices, a stable collusive agreement is characterized when firms' prices and quantities are private information. Conditions are derived whereby an equilibrium exists in which firms truthfully report their sales and then make ...

What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology

By Daron Acemoglu and David Autor

Journal of Economic Literature, June 2012

Goldin and Katz's The Race between Education and Technology is a monumental achievement that supplies a unified framework for interpreting how the demand and supply of human capital have shaped the distribution of earnings in the U.S. labor market over t...

Heterogeneity, Demand for Insurance, and Adverse Selection

By Johannes Spinnewijn

American Economic Journal: Economic Policy, February 2017

Recent evidence underlines the importance of demand frictions distorting insurance choices. Heterogeneous frictions cause the willingness to pay for insurance to be biased upward (relative to value) for those purchasing insurance, but downward for those w...

Mnemonomics: The Sunk Cost Fallacy as a Memory Kludge

By Sandeep Baliga and Jeffrey C. Ely

American Economic Journal: Microeconomics, November 2011

We offer a theory of the sunk cost fallacy as an optimal response to limited memory. As new information arrives, a decision-maker may not remember all the reasons he began a project. The sunk cost gives additional information about future profits and info...

Shifts in US Federal Reserve Goals and Tactics for Monetary Policy: A Role for Penitence?

[Symposium: The First 100 Years of the Federal Reserve]

By Julio J. Rotemberg

Journal of Economic Perspectives, Fall 2013

This paper considers some of the large changes in the Federal Reserve's approach to monetary policy. It shows that, in some important cases, critics who were successful in arguing that past Fed approaches were responsible for mistakes that caused harm ...

The Big One: A Review of Richard Posner's Catastrophe: Risk and Response

By Edward A. Parson

Journal of Economic Literature, March 2007

Richard Posner's Catastrophe: Risk and Response (Oxford University Press, 2004) examines four risks whose worst cases could end advanced human civilization or worse: asteroid impacts, a catastrophic chain reaction initiated in high-energy particle ...

Beggar-Thy-Neighbor Effects of Exchange Rates: A Study of the Renminbi

By Aaditya Mattoo, Prachi Mishra, and Arvind Subramanian

American Economic Journal: Economic Policy, November 2017

This paper estimates the effect of China's exchange rate changes on exports of developing countries in third markets. The degree of competition between China and its developing country competitors in specific products and destinations plays a key role in ...

Uncertainty and Trade Agreements

By Nuno Limão and Giovanni Maggi

American Economic Journal: Microeconomics, November 2015

We explore conditions under which trade agreements can provide gains by reducing trade policy uncertainty. Given the degree of income risk aversion, this is more likely when economies are more open, export supply elasticities are lower, and economies more...

Information Choice Technologies

By Christian Hellwig, Sebastian Kohls, and Laura Veldkamp

American Economic Review, May 2012

Theories based on information costs or frictions have become increasing popular in macroeconomics and macro-finance. The literature has used various types of information choices, such as rational inattention, inattentiveness, information markets and costl...

Does the Market for Women's Labor Need Fixing?

[Symposium: Women in the Labor Market]

By Barbara R. Bergmann

Journal of Economic Perspectives, Winter 1989

I will start by reviewing the evidence that discrimination against women is currently serious and has important consequences for their pay and status. Some of this evidence is of a variety that economists do not commonly examine or take account of. On the...

Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving

By Emmanuel Saez

American Economic Journal: Economic Policy, February 2009

We examine the effects of presentation and information on the take-up of financial subsidies for retirement saving in a large randomized experiment carried out with H&R Block. The subsidies raise take-up and contributions with larger effects when the s...

The Economics of Treasury Securities Markets

By Sushil Bikhchandani and Chi-fu Huang

Journal of Economic Perspectives, Summer 1993

The market for Treasury securities attracted considerable attention recently, after alleged infringements by Salomon Brothers. Several questions have been raised about the best way of selling U.S. government debt. One issue is whether altering the auction...

Affirmative Action: One Size Does Not Fit All

By Kala Krishna and Alexander Tarasov

American Economic Journal: Microeconomics, May 2016

This paper identifies a new reason for giving preferences to the disadvantaged using a model of contests. There are two forces at work: the effort effect working against giving preferences and the selection effect working in favor of them. When educati...

Child Health and Conflict in Côte d'Ivoire

By Camelia Minoiu and Olga Shemyakina

American Economic Review, May 2012

We examine the impact of the 2002-07 civil conflict in Côte d'Ivoire on children's health status measured by height-for-age. We use pre- and post-war survey data coupled with information on the location of violent incidents to capture exposure to th...

Gender and Race Heterogeneity: The Impact of Students with Limited English on Native Students' Performance

By Timothy M. Diette and Ruth Uwaifo Oyelere

American Economic Review, May 2014

Recent evidence suggests that exposure to a larger share of Limited English (LE) students is associated with a slight decline in performance for students at the top of the achievement distribution. In this paper we explore whether LE peer effects differ b...

(Indirect) Input Linkages

By Marcela Eslava, Ana Cecília Fieler, and Daniel Yi Xu

American Economic Review, May 2015

Relative to backward firms, technologically-advanced firms source inputs from other advanced firms. These sourcing patterns lead to a magnification effect of technology adoption. A firm that adopts higher-technology increases the relative supply and deman...

How Wages Change: Micro Evidence from the International Wage Flexibility Project

By William T. Dickens, Lorenz Goette, Erica L. Groshen, Steinar Holden, Julian Messina, Mark E. Schweitzer, Jarkko Turunen, and Melanie E. Ward

Journal of Economic Perspectives, Spring 2007

Workers' wages are not set in a spot market. Instead, the wages of most workers -- at least those who do not switch jobs -- typically change only annually and are mediated by a complex set of institutions and factors such as contracts, unions, standards o...

Gender and Performance: Evidence from School Assignment by Randomized Lottery

By Justine S. Hastings, Thomas J. Kane, and Douglas O. Staiger

American Economic Review, May 2006