Sanctions: Some Simple Analytics

By Jonathan Eaton and Maxim Engers

American Economic Review, May 1999

The Nature of Risk Preferences: Evidence from Insurance Choices

By Levon Barseghyan, Francesca Molinari, Ted O'Donoghue, and Joshua C. Teitelbaum

American Economic Review, October 2013

We use data on insurance deductible choices to estimate a structural model of risky choice that incorporates "standard" risk aversion (diminishing marginal utility for wealth) and probability distortions. We find that probability distortions—characte...

Puzzles: Love and Spaghetti, the Opportunity Cost of Virtue

By Ted Bergstrom

Journal of Economic Perspectives, Spring 1989

In honor of St. Valentine's day, we offer a puzzle about love and a puzzle about virtue.

Some Economics of Trade Secret Law

[Symposium: Intellectual Property]

By David D. Friedman, William M. Landes, and Richard A. Posner

Journal of Economic Perspectives, Winter 1991

Despite the practical importance of trade secrets to the business community, the law of trade secrets is a neglected orphan in economic analysis. This paper sketches an approach to the economics of trade secret law that connects it more closely both to ot...

What Trade-Off of Risk and Incentives?

By Canice Prendergast

American Economic Review, May 2000

European Telecommunications Markets on the Verge of Full Liberalization

[Symposium: Telecommunications Deregulation Around The World]

By Leonard Waverman and Esen Sirel

Journal of Economic Perspectives, Fall 1997

January 1, 1998 is the date when voice telephony is fully liberalized in most European countries. The process of privatization and liberalization has been uneven across Europe; actively embraced by countries such as the U. K., Sweden, and Finland, while o...

Learning from the Doers: Developing Country Lessons for Advanced Economy Growth

By Anusha Chari and Peter Blair Henry

American Economic Review, May 2014

From 1980 to 1992, emerging and developing countries grew by 3.4 percent per year. Their annual rate of growth increased to 5.4 percent between 1993 and 2012. No such increase occurred for advanced nations, whose average growth from 1980 to 2012 was rough...

Trade Agreements and the Nature of Price Determination

By Pol Antràs and Robert W. Staiger

American Economic Review, May 2012

According to the terms-of-trade theory, negotiations over tariffs alone, coupled with an effective market access preservation rule, can bring governments to the efficiency frontier. In this paper, we show that the nature of international price determinati...

What Policies Increase Prosocial Behavior? An Experiment with Referees at the Journal of Public Economics

[Symposium: Academic Production]

By Raj Chetty, Emmanuel Saez, and Laszlo Sandor

Journal of Economic Perspectives, Summer 2014

We evaluate policies to increase prosocial behavior using a field experiment with 1,500 referees at the Journal of Public Economics. We randomly assign referees to four groups: a control group with a six-week deadline to submit a referee report; ...

Does Exchange-Rate Stability Increase Trade and Welfare?

By Philippe Bacchetta and Eric van Wincoop

American Economic Review, December 2000

This paper develops a simple general-equilibrium framework to study the effect of the exchange-rate system on trade and welfare. An important feature of the model is deviations from purchasing-power parity, caused by rigid price setting in buyers' currenc...

Diagnosing Hospital System Bargaining Power in Managed Care Networks

By Matthew S. Lewis and Kevin E. Pflum

American Economic Journal: Economic Policy, February 2015

We investigate the impact of hospital system membership on negotiations between hospitals and managed care organizations (MCOs). Previous research finds that system hospitals secure higher reimbursements by exploiting local market concentration. By levera...

Motivating Wealth-Constrained Actors

By Tracy R. Lewis and David E. M. Sappington

American Economic Review, September 2000

We examine how owners of productive resources (e.g. public enterprises or financial capital) optimally allocate their resources among wealth-constrained operators of unknown ability. Optimal allocations exhibit: (1) shared enterprise profit--the resource ...

Hansen and Sargent's Recursive Models of Dynamic Linear Economies: A Review Essay

By Kenneth D. West

Journal of Economic Literature, March 2017

Lars Peter Hansen and Thomas J. Sargent's book, Recursive Models of Dynamic Linear Economies, exposits, extends, and applies methods for solution and analysis of dynamic stochastic linear quadratic models. The book, which can be used as a monograph...

The Burden of the Nondiversifiable Risk of Entrepreneurship

By Robert E. Hall and Susan E. Woodward

American Economic Review, June 2010

Entrepreneurship is risky. We study the risk facing a well-documented and important class of entrepreneurs, those backed by venture capital. Using a dynamic program, we calculate the certainty-equivalent of the difference between the cash rewards that e...

US International Equity Investment and Past and Prospective Returns

By Stephanie E. Curcuru, Charles P. Thomas, Francis E. Warnock, and Jon Wongswan

American Economic Review, December 2011

Counter to extant stylized facts, using newly available data on country allocations in US investors' foreign equity portfolios we find that (i) US investors do not exhibit returns-chasing behavior, but, consistent with partial portfolio rebalancing, tend ...

A Comparison of Industrial Productivity Growth in Canada and the United States

By Wulong Gu and Mun S. Ho

American Economic Review, May 2000

Getting More Organs for Transplantation

By Judd B. Kessler and Alvin E. Roth

American Economic Review, May 2014

Organs for transplantation are a scarce resource. Paying to increase the supply of organs is illegal in much of the world. We review efforts to increase transplantation by increasing the supply of available organs from living and deceased donors. Progress...

Lessons from the Debt-Deflation Theory of Sudden Stops

By Enrique G. Mendoza

American Economic Review, May 2006

Revealed (P)Reference Theory

By Efe A. Ok, Pietro Ortoleva, and Gil Riella

American Economic Review, January 2015

This paper develops axiomatically a revealed preference theory of reference-dependent choice behavior. Instead of taking the reference for an agent as exogenously given in the description of a choice problem, we suitably relax the Weak Axiom of Revealed P...

Internet Peering

By Jean-Jacques Laffont, Scott Marcus, Patrick Rey, and Jean Tirole

American Economic Review, May 2001